Click to view the earnings moves in NSSC
Is NSSC's 3.6% Earnings Pop Just the Start? Here’s What the Numbers Say
NAPCO Security Technologies (NSSC) released its fiscal Q4 and full-year 2025 results this morning, pushing its shares up by +3.6% to $33.05. While that’s an encouraging start, is this simply a blip—or could the rally continue, based on what history tells us about NSSC around earnings?
Earnings Recap: Solid Margins, Cautious Growth
Today’s report showed mixed results: Q4 net sales climbed 1% year-over-year to $50.7 million, but annual sales dipped 4% as distributor destocking and slow equipment sales lingered. Recurring service revenue (RSR) remained the bright spot, up double-digits both quarterly and for the year, with ultra-high gross margins at 91%. CEO Richard Soloway highlighted robust recurring revenues and optimism for a turnaround in equipment sales as new products gain traction and tariff pressures stabilize.
But while the business continues to show resilience—strong cash generation, share buybacks, and a newly declared $0.14 dividend—the options market was bracing for much bigger action, with a predicted ±12.9% move around earnings. That kind of expectation dwarfs the 3.6% actual post-earnings move.
How Has NSSC Stock Typically Reacted to Earnings?
Historical data suggests a bullish bias on earnings day. Over the past 12 quarters, NSSC averaged a +4.1% gain on the day earnings were announced, with three out of every four earnings days closing higher. Here’s how the numbers break down, summarized from Market Chameleon’s research (full historical analysis here):
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Average Return | +4.1% | +2.4% | +6.8% | -5.0% | +1.4% |
| % of Moves Up | 75.0% | 75.0% | 66.7% | ||
| % of Moves Down | 25.0% | 25.0% | 33.3% |
On top of that, the average move from open to high on earnings day was a solid +6.8%, versus an average move to the low of -5.0%, suggesting upside drift. Even the open-to-close return was typically positive (+1.4%).
For those wanting a look at the size of swings regardless of direction, here are the absolute moves:
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Absolute Average Return | 12.7% | 8.2% | 6.8% | 5.0% | 7.2% |
| Max Absolute Return | 26.6% | 18.3% | 15.1% | 16.9% | 13.1% |
| Min Absolute Return | 3.7% | 1.3% | 0.0% | 0.0% | 2.1% |
What Happens After Earnings?
Investors eyeing the days and weeks after earnings may find some patterns as well. On average, NSSC posts modest gains in the 1- to 3-day window after earnings, with the biggest tendency toward upside the day after:
| Stock Performance | 1 Day After Earnings | 2 Days After Earnings | 3 Days After Earnings | 1 Week After Earnings | 2 Weeks After Earnings |
|---|---|---|---|---|---|
| Average Return | +0.5% | +0.4% | +0.6% | +2.2% | -0.2% |
| % of Moves Up | 63.6% | 54.5% | 36.4% | 45.5% | 54.5% |
| % of Moves Down | 36.4% | 45.5% | 63.6% | 54.5% | 45.5% |
In short: immediate reactions are usually mild, but the week after has skewed to small but frequent gains. You can dig even deeper into NSSC’s historical earnings performance here.
Today’s Options Market: Where’s the Heat?
Traders seemed focused on out-of-the-money calls, betting on a possible breakout or using them to hedge. The standout contract today:
| Option Contract | 19-Sep-25 35 C |
| Volume | 471 |
| VWAP price | 1.07 |
| Open interest | 819 |
| Yesterday's closing price | 0.78 |
This single call option, expiring in September 2025 at a $35 strike, captured nearly half of the day’s total option volume (1,068 contracts traded overall), indicating a healthy dose of bullish speculation—or possibly a tactical hedge against a bigger-than-expected post-earnings move.
The Takeaway: Watching for Follow-Through
So, with a 3.6% gain after earnings and the options market positioned for double-digit swings, NSSC finds itself at an interesting crossroads. History points to a pattern of positive surprises on earnings days and moderate drift higher in the short run, but today’s reaction fell well short of the wild 12.9% move that options were pricing in.
If the new product launches and recurring revenue growth pan out, bullish options traders could yet be vindicated. In the meantime, investors would be wise to keep an eye on the stock’s drift in coming days—and maybe have a closer look at how it typically reacts after earnings. Check out all the historical stats on NSSC's earnings page here.
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