The analysts might have been a bit too bullish on Napco Security Technologies, Inc. (NASDAQ:NSSC), given that the company fell short of expectations when it released its first-quarter results last week. Results look to have been somewhat negative - revenue fell 5.5% short of analyst estimates at US$44m, and statutory earnings of US$0.30 per share missed forecasts by 10.0%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Napco Security Technologies

Taking into account the latest results, the most recent consensus for Napco Security Technologies from six analysts is for revenues of US$203.1m in 2025. If met, it would imply a credible 6.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 3.5% to US$1.43. Before this earnings report, the analysts had been forecasting revenues of US$211.4m and earnings per share (EPS) of US$1.57 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The consensus price target fell 18% to US$44.50, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Napco Security Technologies analyst has a price target of US$52.00 per share, while the most pessimistic values it at US$32.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Napco Security Technologies shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Napco Security Technologies' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Napco Security Technologies' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.4% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.3% annually. Factoring in the forecast slowdown in growth, it looks like Napco Security Technologies is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Napco Security Technologies going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.