The security technology ecosystem has started to strengthen, lifting the Zacks Security and Safety Services Industry into the top 14% of over 240 Zacks industries.
Earnings estimates for security and safety services stocks are rising as demand for physical security, cybersecurity, and workplace safety has started to accelerate and has been spurred by new technologies like AI-driven surveillance and access control.
Benefiting from expanding margins and starting to show stronger growth potential, here are four stocks to watch from the top-rated Zacks Security and Safety Services Industry.
Smart Home & Security Technology Leaders
ADT ADT), one of the most well-known security services providers, is starting to stand out along with Resideo Technologies REZI, which also provides smart-home and security hardware services.
Both stocks are sporting a Zacks Rank #2 (Buy), with Resideo being a provider of security cameras, thermostats, IoT devices, and other home-automation products that overlap with ADT’s hardware ecosystem of professionally monitored security systems and sensors.
ADT’s service-heavy business model, including recurring revenue from security monitoring, has become more attractive with annual earnings expected to be flat this year but projected to increase 4% in FY27 to $0.93 per share. With ADT stock trading at $6, its valuation is hard to ignore at a 7X forward earnings multiple (P/E), while offering a 3.36% annual dividend yield.
ADT’s sales growth may not be as enticing as some of its broader industry peers, but typically brings in about $5 billion in annual revenue, with its price-to-forward-sales (P/S) ratio being well below the often preferred level of 2X.
Trading around $34 a share, Resideo’s stock is also checking the box in terms of valuation and has more appealing growth prospects and the more robust top and bottom lines, but doesn’t offer a dividend at the moment. Still, Resideo’s forward P/E and P/S valuations are nicely beneath the industry averages of 19X and 2X, respectively.
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A Leading Security Hardware Manufacturer
Regarding upcoming players in the security and safety services industry, Napco Security Technologies’ NSSC) expansion has become appealing as a developer, manufacturer, and distributor of security alarm products and door security devices for commercial and residential installations.
Notably, Napco manufactures the alarms, access control, and monitoring equipment that are used by security companies such as ADT. Being a prime beneficiary of the strengthening security technology ecosystem, Napco’s growth prospects are among the most appealing in the industry as FY26 and FY27 sales are projected to increase over 11%, with projections edging over $200 million.
Better still, FY26 EPS is projected to spike 22% this year with Napco’s annual earnings projected to rise another 13% in FY27 to $1.65 per share. Napco stock is trading at around $40 a share and sports a Zacks Rank #2 (Buy) considering its attractive outlook despite commanding a premium of 27X forward earnings and 7X forward sales.
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The Identity Verification Leader
Last but not least is Intellicheck Mobilisa IDN), which is currently boasting a Zacks Rank #1 (Strong Buy) with a vastly improving niche as the industry leader in identity verification management, preventing the unauthorized use of IDs to stop identity-based fraud.
It’s noteworthy that Intellicheck is the only software-as-a-service (SaaS) based validation and proofing company that uses a unique and proprietary analysis of DMV-issued IDs to create trusted, real-time customer identity verification experiences across a variety of sectors, both in-person and digitally.
Intellicheck is commanding an even steeper premium in terms of forward P/E (56X), but rapid growth appears to be on the horizon. To that point, Intellicheck is directly benefiting from the rise of AI, both because AI is making fraud more sophisticated and is increasing demand for the company’s solutions, and because it’s integrating AI-driven capabilities into its own identity-verification platform.
This has made IDN one of the more intriguing stocks trading under $10, with Intellicheck expected to rip further past the profitability line as shown by the EPS projections below. Starting to illustrate strong earnings potential, this comes as Intellicheck’s annual sales forecast call for 13% growth in FY26 and a 17% increase in FY27 to $30.05 million.
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Bottom Line
These top-rated Zacks Security and Safety Services Industry stocks are experiencing a favorable trend of EPS revisions, suggesting more upside is likely ahead and making now an ideal time to buy.
There is also the long-term argument for keeping exposure to these companies in the portfolio, considering higher demand for security and safety services is increasingly evident, driven by rising crime concerns, workplace-safety requirements, urbanization, and the adoption of advanced technologies like AI-enhanced surveillance and verification.
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
