NSSC 10-DAY DEADLINE ALERT: Napco (NSSC) Under Scrutiny, Investor Suit and Sales Slump Shake Investor Confidence- Hagens Berman

NSSC Investors with Losses Encouraged to Contact Hagens Berman Before June 24th Deadline

San Francisco, California--(Newsfile Corp. - June 14, 2025) - Shares in Napco Security Technologies, Inc. (NASDAQ: NSSC) are trading down nearly 21% year-to-date, as the security technology company continues to face heightened scrutiny as it navigates both legal and operational challenges. Most recently, on May 5, 2025, Napco released its third-quarter financial results for fiscal year 2025, revealing mixed performance metrics amid an ongoing securities class action lawsuit that centers on its distribution practices and sales forecasting.

Hagens Berman is investigating the alleged claims and urges Napco investors who suffered substantial losses to submit your losses now.

Class Period: Feb. 5, 2024 - Feb. 3, 2025
Lead Plaintiff Deadline: June 24, 2025
Visit: www.hbsslaw.com/investor-fraud/nssc
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844-916-0895

Third Quarter Financial Overview

Napco's third-quarter results showed a 10.8% year-over-year drop in net sales, totaling $43.96 million. While the company managed to surpass earnings-per-share expectations-reporting $0.36 per share versus a $0.29 forecast-overall revenue missed Wall Street estimates, and net income declined by over 23% compared to the previous year. The company attributed the sales shortfall primarily to inventory reductions by key distributors, a factor that has become central to the ongoing lawsuit.

Background of the Securities Class Action

The class action, filed as Patel v. Napco Security Technologies, Inc., et al., alleges that Napco's leadership misled investors about its ability to accurately predict hardware demand and sustain ambitious margin targets for fiscal 2026. The complaint claims that despite public assurances of strong hardware division growth and effective forecasting, Napco failed to disclose vulnerabilities in its distribution network and the risks associated with relying on a limited number of major distributors.

The situation escalated after the company's February 3, 2025, earnings report, which revealed a 25% decrease in equipment sales and prompted Napco to withdraw its 45% EBITDA margin target for fiscal 2026. These disclosures led to a dramatic 26% decline in Napco's share price in a single trading session, erasing nearly $10 per share in value.

Allegations and Share Price Impact

Plaintiffs allege that Napco's optimistic statements about its sales pipeline and margin outlook were misleading, given the company's inability to accurately forecast demand and the impact of distributor inventory adjustments. The lawsuit contends that these omissions artificially inflated Napco's stock price during the class period, causing substantial losses when the true financial picture emerged.