Napco Security Technologies, Inc. (NSSC) PT Raised to $60 at Lake Street Capital Markets

Lake Street Capital Markets analyst Jaeson A. Schmidt raised the price target on Napco Security Technologies, Inc. (NASDAQ: NSSC) to $60.00 (from $54.00) while maintaining a Buy rating.

The analyst commented: "We think Napco remains positioned to drive solid, double-digit top and bottom line growth and is on a path to its target model of $150M in equipment revenue, $150M in recurring revenue, and a 45% AEBITDA margin. We believe investors continue to underestimate the potential earnings power in the model that will emerge as the Company ramps to these targets and look for shares to see further multiple expansion as this is better appreciated. In the near term, we note the Company has reported three consecutive quarters of upside results since the restatement issue last year, and we think the business is tracking to expectations through the first two months of FY4Q (Jun). Historically, FY4Q is seasonally strong, and consensus is modeling for 1.6% q/q
growth. Looking back to FY2000, the median q/q growth rate in FY4Q is 24.9% (average: 24.4%), and sequential growth of 1.6% would represent the second lowest rate over this timeframe (-12.3% q/q in FY20). While we do not expect a 20%+ q/q jump this year, we think the current consensus looks conservative. We are reiterating our Buy rating and raising our price target to $60."

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