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Spotting Winners: Napco (NASDAQ:NSSC) And Electrical Systems Stocks In Q1


Kayode Omotosho /
2024/07/08 3:49 am EDT

Let's dig into the relative performance of Napco (NASDAQ:NSSC) and its peers as we unravel the now-completed Q1 electrical systems earnings season.

Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.

The 11 electrical systems stocks we track reported a weaker Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and electrical systems stocks have had a rough stretch, with share prices down 5.2% on average since the previous earnings results.

Napco (NASDAQ:NSSC)

The first company to introduce digital alarm communication over telephone lines, Napco (NASDAQGS:NSSC) offers intrusion and fire alarm systems, access control systems, and video surveillance solutions.

Napco reported revenues of $49.27 million, up 13.2% year on year, topping analysts' expectations by 1.3%. It was a strong quarter for the company, with revenue and EPS exceeding expectations.

Richard Soloway, Chairman and CEO, commented, "The third quarter of fiscal 2024 was the strongest quarter in our Company's history. Revenue was $49.3 million, which was the highest quarterly sales we ever achieved and was the fourteenth consecutive quarter of record sales for a quarterly reporting period...

Napco Total Revenue

The stock is up 25.8% since the results and currently trades at $53.52.

Read why we think that Napco is one of the best electrical systems stocks, our full report is free.

Best Q1: Encore Wire (NASDAQ:WIRE)

Started in a small warehouse in Texas in 1989, Encore Wire (NASDAQ:WIRE) manufactures a range of electrical building wire and cables.

Encore Wire reported revenues of $632.7 million, down 4.2% year on year, outperforming analysts' expectations by 7.3%. It was an impressive quarter for the company, with revenue and EPS exceeding expectations.

Encore Wire Total Revenue

Encore Wire achieved the biggest analyst estimates beat among its peers. The stock is up 2.2% since the results and currently trades at $289.95.

Is now the time to buy Encore Wire? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Identiv (NASDAQ:INVE)

Emerging from bankruptcy and rebranding in 2013, Identiv (NASDAQCM:INVE) provides digital identity and security solutions for various industries.

Identiv reported revenues of $22.49 million, down 13.5% year on year, falling short of analysts' expectations by 2.2%. It was a weak quarter for the company, with revenue and EPS falling below analysts' estimates.

The stock is down 18.6% since the results and currently trades at $4.11.

Read our full analysis of Identiv's results here.

Whirlpool (NYSE:WHR)

Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.

Whirlpool reported revenues of $4.49 billion, down 3.4% year on year, surpassing analysts' expectations by 1.7%. It was a very strong quarter for the company, with an impressive beat of analysts' volume estimates and a decent beat of analysts' earnings estimates.

Whirlpool scored the highest full-year guidance raise among its peers. The stock is down 4.5% since the results and currently trades at $100.94.

Read our full, actionable report on Whirlpool here, it's free.

Vertiv (NYSE:VRT)

Formerly part of Emerson Electric, Vertiv (NYSE:VRT) manufactures and services infrastructure technology products for data centers and communication networks.

Vertiv reported revenues of $1.64 billion, up 7.8% year on year, in line with analysts' expectations. It was a slower quarter for the company, with a miss of analysts' earnings estimates and full-year revenue guidance missing analysts' expectations.

Vertiv had the weakest full-year guidance update among its peers. The stock is up 15.8% since the results and currently trades at $91.7.

Read our full, actionable report on Vertiv here, it's free.

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