What Happened:
Shares of electronic security systems manufacturer Napco Security Technologies (NASDAQ:NSSC) fell 18.4% in the morning session after the company announced underwhelming second-quarter earnings results. Adjusted EBITDA missed, EPS was roughly in line, while revenue beat by a small amount. Overall, this was a mixed quarter, and the stock's reaction suggests expectations were high heading into the earnings announcement.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Napco? Access our full analysis report here, it’s free.
What is the market telling us:
Napco’s shares are not very volatile than the market average and over the last year have had only 14 moves greater than 5%. But moves this big are very rare even for Napco and that is indicating to us that this news had a significant impact on the market’s perception of the business.
Napco is up 40.4% since the beginning of the year, but at $47.45 per share it is still trading 18.2% below its 52-week high of $58 from August 2024. Investors who bought $1,000 worth of Napco’s shares 5 years ago would now be looking at an investment worth $2,893.
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