Analyzing NAPCO Security Technologies (NASDAQ:NSSC) and SoundThinking (NASDAQ:SSTI)

SoundThinking (NASDAQ:SSTI) and NAPCO Security Technologies (NASDAQ:NSSC) are both small-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Valuation and Earnings

This table compares SoundThinking and NAPCO Security Technologies”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SoundThinking	$104.13 million	0.78	-$9.42 million	($0.74)	-8.64
NAPCO Security Technologies	$192.03 million	7.12	$43.41 million	$1.33	28.80

NAPCO Security Technologies has higher revenue and earnings than SoundThinking. SoundThinking is trading at a lower price-to-earnings ratio than NAPCO Security Technologies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares SoundThinking and NAPCO Security Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SoundThinking	-9.05%	-12.73%	-6.97%
NAPCO Security Technologies	24.70%	27.45%	23.48%

Volatility and Risk

SoundThinking has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, NAPCO Security Technologies has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500.

Insider & Institutional Ownership

60.7% of SoundThinking shares are held by institutional investors. Comparatively, 85.1% of NAPCO Security Technologies shares are held by institutional investors. 10.4% of SoundThinking shares are held by insiders. Comparatively, 5.7% of NAPCO Security Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for SoundThinking and NAPCO Security Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoundThinking	1	3	3	0	2.29
NAPCO Security Technologies	0	2	6	0	2.75

SoundThinking presently has a consensus price target of $14.00, indicating a potential upside of 119.09%. NAPCO Security Technologies has a consensus price target of $47.83, indicating a potential upside of 24.86%. Given SoundThinking’s higher possible upside, analysts clearly believe SoundThinking is more favorable than NAPCO Security Technologies.

Summary

NAPCO Security Technologies beats SoundThinking on 12 of the 14 factors compared between the two stocks.

About SoundThinking

SoundThinking, Inc., a public safety technology company that provides transformative solutions and strategic advisory services for law enforcement and civic leadership. Its SafetySmart Platform, an integrated suite of data-driven tools that enable law enforcement and community violence prevention and health organizations to be efficient in public safety outcomes. It offers ShotSpotter, an acoustic gunshot detection system; CrimeTracer, a law enforcement search engine; CaseBuilder, an investigation management system; and ResourceRouter, a software that directs patrol and community anti-violence resources to help maximize their impact. The company sells its solutions through its direct sales teams. The company was formerly known as ShotSpotter, Inc. and changed its name to SoundThinking, Inc. in April 2023. SoundThinking, Inc. was founded in 1996 and is headquartered in Fremont, California.

About NAPCO Security Technologies

Napco Security Technologies, Inc. develops, manufactures, and sells electronic security systems for commercial, residential, institutional, industrial, and governmental applications in the United States and internationally. Its access control systems include various types of identification readers, control panels, PC-based computers, and electronically activated door-locking devices; intrusion and fire alarm systems, consists of various detectors, a control panel, a digital keypad and signaling equipment; and door locking devices comprise microprocessor-based electronic door locks with push button, card readers and bio-metric operation, door alarms, mechanical door locks, and simple dead bolt locks. The company’s alarm systems include automatic communicators, cellular communication devices, control panels, combination control panels/digital communicators and digital keypad systems, fire alarm control panels, and area detectors; and video surveillance systems comprise video cameras, control panels, video monitors, or PCs. It also buys and resells various identification readers, video cameras, PC-based computers, and various peripheral equipment for access control and video surveillance systems; offers school security products; and markets peripheral and related equipment manufactured by other companies. The company markets and sells its products to independent distributors, dealers, and installers of security equipment. Napco Security Technologies, Inc. was founded in 1969 and is headquartered in Amityville, New York.