Napco Security Technologies (NSSC) Faces Securities Class Action After Disappointing Earnings, Distributor Issues- Hagens Berman

SAN FRANCISCO, April 29, 2025 /PRNewswire/ -- A securities class action lawsuit styled Patel v. Napco Security Technologies, Inc., et al., No. 1:25-cv-02308 (E.D.N.Y.) has been filed after investors saw the price of their shares tumble 26% after Napco (NASDAQ: NSSC) reported a sharp decline in second-quarter 2025 earnings and margins, and revealed problems with its distribution network. The lawsuit seeks to represent investors who purchased Napco securities between February 5, 2024 and February 3, 2025.

Hagens Berman urges Napco investors who suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge who may be able to assist in the investigation to contact its attorneys.

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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Napco Security Technologies, Inc. (NSSC) Securities Class Action:

The lawsuit is focused on the propriety of Napco's statements concerning its sales and forecasting practices.

The complaint alleges that Napco made false and misleading statements while failing to disclose crucial information to investors. More specifically, the lawsuit claims that:

• Napco provided investors with material information about Napco's overall expected growth and strength in its hardware division including, in part, the company's assurances that it would achieve its fiscal 2026 growth and margin targets as supported by its forecasting and execution abilities related to its hardware products; but
• Despite the company's assurances, it failed to disclose that it was simply not equipped to adequately forecast demand for its products or otherwise minimized the impact of potential demand fluctuations while continuing to promote its lofty margin projections which relied on ongoing increased sales volumes.

Investors learned the truth on February 3, 2025, when Napco announced dismal Q2 2025 financial results. Among other things, as compared to the prior year Q2, the company reported a 25% drop in equipment sales and substantial declines in its gross margin, gross profit for equipment revenue, and gross margin for equipment revenue. The company blamed its disappointing performance on "reduced sales to two of our larger distributors," with one distributor citing efforts to reduce inventory.

These disclosures sent Napco shares spiraling downward, collapsing $9.77, or 26%, in a single day, and unsurprisingly led to analyst downgrades.

"We're investigating whether Napco may have misled investors about its sales practices, forecasting abilities, and growth prospects," said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you invested in Napco and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »

If you'd like more information and answers to frequently asked questions about the Napco case and our investigation, read more »

Whistleblowers: Persons with non-public information regarding Napco should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

SOURCE Hagens Berman Sobol Shapiro LLP