Craig-Hallum cuts Napco Security to Hold after ‘incredibly disappointing’ Q2

As previously reported, Craig-Hallum downgraded Napco Security (NSSC) to Hold from Buy with a price target of $28, down from $48. The firm says Napco delivered “an incredibly disappointing” Q2, with a wide miss on sales and profitability as Equipment Revenues remained weak. In addition, Napco missed on Recurring Service Revs, with the mid-teens year-over-year growth rate well below the 20%-plus growth achieved in every other quarter the past couple of years, Craig-Hallum adds. The firm is materially lowering its go forward forecasts and believes the stock multiple will be impacted for an extended period until the company can deliver several clean quarters.