Napco, a leading provider of security products and software, recently released its quarterly earnings report, revealing a mixed bag of results. The company fell short of analyst expectations for earnings, reporting $0.36 per share, compared to the Zacks Consensus Estimate of $0.37 per share. This represents a -2.70% earnings surprise. However, Napco exceeded revenue expectations, posting $50.33 million in revenue for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.30%. This figure also marks a significant increase from the $44.66 million in revenue reported during the same period last year.
While Napco has outperformed the market so far this year, with its shares rising by approximately 62%, investors are naturally curious about the company’s future prospects. Determining the trajectory of Napco’s stock hinges on a number of factors, including management’s guidance and the evolution of earnings estimates. The Zacks Rank, a well-established rating tool, can provide valuable insights into these areas by leveraging the power of earnings estimate revisions.
Prior to the release of the earnings report, the trend in estimate revisions for Napco was mixed. While the recent earnings report could potentially alter this trend, the current status translates into a Zacks Rank #3 (Hold) for the stock. This suggests that Napco shares are expected to perform in line with the broader market in the near term.
Looking ahead, it will be crucial to monitor how estimates for upcoming quarters and the current fiscal year change in the days to come. Currently, the consensus EPS estimate stands at $0.36 on $47.87 million in revenues for the next quarter and $1.63 on $213.16 million in revenues for the current fiscal year.
It’s also important to consider the impact of the industry outlook on Napco’s stock performance. The Security and Safety Services industry, which Napco belongs to, currently ranks within the top 34% of the 250+ Zacks industries. Research indicates that the top 50% of Zacks-ranked industries consistently outperform the bottom 50% by a factor of more than 2 to 1.
Another company within the Security and Safety Services industry, Lakeland Industries (LAKE), is scheduled to release its earnings report for the quarter ended July 2024 on September 4. Analysts expect the safety garments manufacturer to report quarterly earnings of $0.42 per share, representing a year-over-year increase of +31.3%. The consensus EPS estimate for the quarter has remained unchanged over the past 30 days. Lakeland Industries’ revenue is projected to reach $41.1 million, representing a 24.3% increase compared to the same period last year.
