Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Napco Security Technologies, Inc. (NSSC)

/EIN News/ -- NEW YORK, April 29, 2025 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Eastern District of New York on behalf of all persons or entities who purchased or otherwise acquired Napco Security Technologies, Inc. (“Napco” or the “Company”) (NASDAQ: NSSC) securities between February 5, 2024 and February 3, 2025, inclusive (the “Class Period”). The lawsuit seeks to recover damages for the Company’s investors under the federal securities laws.

        The Complaint alleges that Defendants provided investors with material information concerning Napco’s overall expected growth and strength in the Company’s hardware division. The Complaint continues to allege that Defendants’ statements included, among other things, confidence in Napco’s ability to achieve its fiscal 2026 growth projections based on its ability to both appropriately forecast and execute upon the alleged demand for its hardware products.

The Complaint alleges that Defendants provided these overwhelmingly positive statements to investors while, at the same time, disseminating materially false and misleading statements and/or concealing material adverse facts concerning the true state of Napco’s ability to forecast the demand for its products and/or the true state of Napco’s negotiating position with distributors. The Complaint further alleges that despite making lofty long-term projections and claiming one-off setbacks to hardware sales, Napco’s forecasting processes fell short as sales continued to decline and, ultimately, derailed the Company’s long-term projections. The Complaint continues to allege that such statements absent these material facts caused Plaintiff and other shareholders to purchase Napco’s securities at artificially inflated prices.

According to the Complaint on February 3, 2025, Napco announced its financial results for the second quarter of fiscal 2025, revealing a significant reduction in hardware sales for the quarter. The Complaint alleges that the Company attributed the decline “primarily … to reduced sales from 2 of the company’s larger distributors.” The Complaint continues to allege that as a result of the setback in sales, Defendants additionally pulled back their long-term 45% EBITDA margin target, as the Company stated it didn’t know if the target can be achieved by the end of fiscal 2026.

According to the Complaint, investors and analysts reacted immediately to Napco’s revelation. The Complaint further alleges that the price of Napco’s common stock declined dramatically. The Complaint states from a closing market price of $36.70 per share on January 31, 2024, Napco’s stock price fell to $26.93 per share on February 3, 2025, a decline of about 26.62% in the span of just a single day.

Investors who purchased or otherwise acquired shares of Napco should contact the Firm prior to the June 24, 2025 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

Please visit our website at http://www.gme-law.com for more information about the firm.