Looking back on specialized technology stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Napco (NASDAQ: NSSC) and its peers.

Companies in this sector, especially if they invest wisely, could see demand tailwinds as the world moves towards more IoT (Internet of Things), automation, and analytics. Enterprises across most industries will balk at taking these journeys solo and will enlist companies with expertise and scale in these areas. However, headwinds could include rising competition from larger technology firms, as digitization lowers barriers to entry in the space. Additionally, companies in the space will likely face evolving regulatory scrutiny over data privacy, particularly for surveillance and security technologies. This could make companies have to continually pivot and invest.

The 8 specialized technology stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.1% while next quarter’s revenue guidance was 0.6% below.

In light of this news, share prices of the companies have held steady as they are up 5% on average since the latest earnings results.

Best Q2: Napco (NASDAQ: NSSC)

Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ: NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.

Napco reported revenues of $50.72 million, flat year on year. This print exceeded analysts’ expectations by 14.1%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates.

Richard Soloway, Chairman and CEO, commented, "With the completion of our fourth quarter of Fiscal 2025, our RSR remains strong as we continue to see double digit growth in Q4 and annually and gross margins at 91%. RSR represents 44% and 48% of total revenue in Q4 and annually, respectively, and our RSR has a prospective run rate of approximately $94 million based on our July 2025 recurring service revenue, which reflects approximately a $5 million increase from what was reported at the end of our third quarter of Fiscal 2025. We faced challenges with our equipment revenue performance throughout Fiscal 2025 as distributor destocking lingered throughout the year as well as timing of larger project work in our door-locking segment, however we are encouraged by the 27% increase in equipment sales from Q3 to Q4, and we are optimistic that equipment sales will grow in Fiscal 2026, and believe we are well positioned with the evolving tariff environment.

Napco pulled off the biggest analyst estimates beat but had the slowest revenue growth of the whole group. Unsurprisingly, the stock is up 21.3% since reporting and currently trades at $38.45.

Is now the time to buy Napco? Access our full analysis of the earnings results here, it’s free.

Mirion (NYSE: MIR)

With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE: MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.

Mirion reported revenues of $222.9 million, up 7.6% year on year, outperforming analysts’ expectations by 3.1%. The business had a very strong quarter with EPS in line with analysts’ estimates and a decent beat of analysts’ full-year EPS guidance estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.2% since reporting. It currently trades at $20.50.

Is now the time to buy Mirion? Access our full analysis of the earnings results here, it’s free.

Cognex (NASDAQ: CGNX)

Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ: CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.

Cognex reported revenues of $249.1 million, up 4.1% year on year, exceeding analysts’ expectations by 1.3%. Still, it was a slower quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and revenue guidance for next quarter meeting analysts’ expectations.

Interestingly, the stock is up 30.9% since the results and currently trades at $44.18.

Read our full analysis of Cognex’s results here.

OSI Systems (NASDAQ: OSIS)

With security scanners deployed at airports and borders worldwide and patient monitors used in hospitals across the globe, OSI Systems (NASDAQ: OSIS) designs and manufactures specialized electronic systems for security screening, patient monitoring, and optoelectronic applications.

OSI Systems reported revenues of $505 million, up 5% year on year. This print beat analysts’ expectations by 2.3%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ full-year EPS guidance estimates and full-year revenue guidance topping analysts’ expectations.

The stock is up 3% since reporting and currently trades at $230.05.

Read our full, actionable report on OSI Systems here, it’s free.

Crane NXT (NYSE: CXT)

Born from a corporate transformation completed in 2023, Crane NXT (NYSE: CXT) provides specialized technology solutions for payment processing, banknote security, and authentication systems for financial institutions and businesses.

Crane NXT reported revenues of $404.4 million, up 9.1% year on year. This result topped analysts’ expectations by 5.9%. It was a very strong quarter as it also logged an impressive beat of analysts’ organic revenue estimates and a narrow beat of analysts’ full-year EPS guidance estimates.

The stock is up 6.1% since reporting and currently trades at $59.73.

Read our full, actionable report on Crane NXT here, it’s free.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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