MeritValue

NAPCO SECURITY TECHNOLOGIES, INC

NSSCdata completeness 88%15 fiscal years on file
The thesis, from the filings

NAPCO SECURITY TECHNOLOGIES, INC earns about 34% on invested capital, far above its ~9% cost of capital, with a roughly flat share count — a real edge showing up in the numbers. The estimate methods put fair value between $7.7 and $73.81 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$114M1$143.6M2$170M3$188.8M3$181.6M3
Net income$15.4M4$19.6M5$27.1M6$49.8M6$43.4M6
Operating cash flow$23M7$8.33M8$24.7M9$45.4M9$53.5M9
Capital expenditure$1.01M10$1.48M11$2.96M12$1.59M12$2.12M12
Free cash flow (derived)$22M7$6.85M8$21.7M9$43.8M9$51.4M9
Total debt$11.7M13————
Cash & equivalents$34.8M14$41.7M15$36M16$65.3M17$83.1M17
Diluted shares36.8M36.9M37.0M37.1M36.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$46.19
your share of equity
Profit it earned you last year
$11.89
Free cash flow it threw off
$14.09
Debt you’d be carrying
—

10 shares is a claim on $46.19 of net worth that earned you $11.89 and generated $14.09 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
34% avg · 5y
FY21 22%FY22 27%FY23 26%FY24 44%FY25 51%

It earned about 34% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−1% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $7.7 and $73.81 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$73.81
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$43.8M
DCF · Growth Exit 5Y
$41.38
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$43.8M
Earnings Power Value
$7.7
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$27.1M
  • growthAssumed0.0%
Graham Number
$11.12
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $41.38
The three cases
Bear0.0%$19.41
Base20.0%$41.38
Bull20.0%$41.38

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-06-30 · accession 0001558370-23-015591 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-06-30 · accession 0001558370-24-012547 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2023-06-30 · accession 0001558370-25-011750 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2021-06-30 · accession 0001558370-23-015591 (NetIncomeLoss)
  5. 10-K · period ending 2022-06-30 · accession 0001558370-24-012547 (NetIncomeLoss)
  6. 10-K · period ending 2023-06-30 · accession 0001558370-25-011750 (NetIncomeLoss)
  7. 10-K · period ending 2021-06-30 · accession 0001558370-23-015591 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-06-30 · accession 0001558370-24-012547 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-06-30 · accession 0001558370-25-011750 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-06-30 · accession 0001558370-23-015591 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-06-30 · accession 0001558370-24-012547 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-06-30 · accession 0001558370-25-011750 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-06-30 · accession 0001558370-22-014041 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2021-06-30 · accession 0001558370-22-014041 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2022-06-30 · accession 0001558370-23-015591 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2023-06-30 · accession 0001558370-24-012547 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2024-06-30 · accession 0001558370-25-011750 (CashAndCashEquivalentsAtCarryingValue)