Q4 Earnings Outperformers: Napco (NASDAQ:NSSC) And The Rest Of The Specialized Technology Stocks
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at specialized technology stocks, starting with Napco (NASDAQ:NSSC).
Companies in this sector, especially if they invest wisely, could see demand tailwinds as the world moves towards more IoT (Internet of Things), automation, and analytics. Enterprises across most industries will balk at taking these journeys solo and will enlist companies with expertise and scale in these areas. However, headwinds could include rising competition from larger technology firms, as digitization lowers barriers to entry in the space. Additionally, companies in the space will likely face evolving regulatory scrutiny over data privacy, particularly for surveillance and security technologies. This could make companies have to continually pivot and invest.
The 8 specialized technology stocks we track reported a mixed Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.7% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.4% since the latest earnings results.
Weakest Q4: Napco (NASDAQ:NSSC)
Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ:NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.
Napco reported revenues of $42.93 million, down 9.7% year on year. This print fell short of analysts’ expectations by 13.9%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EPS estimates.
Richard Soloway, Chairman and CEO, commented, "As we complete the first half of Fiscal 2025, our performance has yielded mixed results."
Napco Total Revenue
Napco delivered the weakest performance against analyst estimates of the whole group. The stock is down 38.1% since reporting and currently trades at $22.71.
Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE:PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.
PAR Technology reported revenues of $105 million, up 50.2% year on year, outperforming analysts’ expectations by 4.3%. The business had an incredible quarter with an impressive beat of analysts’ ARR and EPS estimates.
PAR Technology Total Revenue
PAR Technology achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 1.6% since reporting. It currently trades at $61.70.
Born from a corporate transformation completed in 2023, Crane NXT (NYSE:CXT) provides specialized technology solutions for payment processing, banknote security, and authentication systems for financial institutions and businesses.
Crane NXT reported revenues of $399.1 million, up 11.8% year on year, falling short of analysts’ expectations by 2.7%. It was a slower quarter as it posted a miss of analysts’ organic revenue estimates and EPS in line with analysts’ estimates.
As expected, the stock is down 12.8% since the results and currently trades at $51.10.
Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE:ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.
Arlo Technologies reported revenues of $121.6 million, down 10% year on year. This number met analysts’ expectations. More broadly, it was a mixed quarter with EPS inline with analysts' estimates.
Arlo Technologies had the slowest revenue growth among its peers. The stock is down 19.4% since reporting and currently trades at $9.62.
Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ:CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.
Cognex reported revenues of $229.7 million, up 16.8% year on year. This print surpassed analysts’ expectations by 4%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ EPS estimates.
The stock is down 23.6% since reporting and currently trades at $30.01.
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