National Presto Jumps 45% in a Year: Buy, Sell or Hold the Stock?

National Presto Industries, Inc. NPK shares have climbed 44.5% in the past year against the industry’s 26.4% decline. The company has outperformed other industry players, including GPGI, Inc. GPGI and Carlisle Companies Incorporated CSL. Shares of GPGI and CSL have declined 30.3% and 8.4%, respectively, in the same time frame. NPK benefits from strong Defense growth, a sizable backlog, new contract awards, manufacturing capacity expansion and robust liquidity supporting future growth.

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A Key Look Into NPK’s Business Operations

National Presto operates through Housewares/Small Appliance, Defense and Safety segments. The Housewares business offers pressure cookers, canners, skillets, griddles, fryers, pizza ovens, corn poppers, dehydrators and other kitchen and comfort appliances, primarily in the United States and Canada. The Defense segment manufactures 40mm ammunition, medium-caliber cartridge cases, precision mechanical and electromechanical products, metal parts, energetic devices and other ordnance-related products, mainly for the U.S. Department of Defense and prime contractors. Its operations include AMTEC, Spectra, Amron, Tech Ord and Woodlawn, with significant contracts supporting the U.S. Army’s 40mm ammunition requirements. The Safety segment, currently centered on Rely Innovations, markets smoke, carbon monoxide and combination alarms, along with a PFAS-free foam commercial fire extinguisher. 

National Presto’s Key Tailwinds

NPK’s Defense segment remains its strongest growth engine, supported by rising shipments from a sizable backlog. For the first six months of 2026, Defense sales increased 25% year over year to $226.5 million, while gross profit rose to $45.7 million from $36.8 million. Operating profit advanced to $33.7 million from $27.7 million. The momentum strengthened in the second quarter, when Defense sales climbed 27% to $127 million and operating profit increased to $19.4 million from $14.6 million. With the Defense backlog reaching $1.8 billion as of July 5, 2026, and expected to be fulfilled over 18-48 months, the company has meaningful revenue visibility and a substantial base for future shipments.

National Presto’s Defense growth prospects received another boost from $159.1 million of new awards announced in August 2026. The U.S. Army awarded AMTEC option orders under year five of its current five-year 40mm systems contract, with deliveries scheduled from mid-2028 through early 2030. Separately, Spectra Technologies received a Boeing subcontract to produce warheads for the Small Diameter Bomb program, with deliveries expected to begin in September 2027 after completion of its current orders. These awards extend the Defense segment’s production pipeline beyond its existing backlog and reinforce National Presto’s position across ammunition and energetic ordnance programs, supporting longer-term production activity.

National Presto is also investing to expand its long-term Defense manufacturing capabilities. National Defense Corporation is developing a new medium-caliber ammunition production and test facility at the Tech Ord campus in Clear Lake, SD, representing an investment of approximately $90 million. The facility is expected to incorporate advanced automation, digital quality systems and scalable production processes aimed at improving flexibility, efficiency and responsiveness to evolving DoD requirements. Construction began in mid-June 2026, with completion anticipated in 2028, positioning the company to address a growing portfolio of medium-caliber ammunition and next-generation programs.

Improving cash generation and a strong liquidity position provide National Presto with financial flexibility to support its growth initiatives. Net cash provided by operating activities surged to $44.1 million in the first six months of 2026 from $1.5 million a year earlier, aided by higher earnings and collections on customer sales. The company also repaid the $23.6 million balance outstanding on its line of credit, leaving no borrowings at July 5, 2026. Working capital increased to $324.6 million, while the current ratio improved to 5.2 from 4.2 at year-end 2025. Management believes operating cash flows and its credit facility are sufficient to fund capital needs, dividends, acquisitions and future growth.

Challenges Persist for NPK’s Business

National Presto faces pressure in its Housewares/Small Appliances business, where first-half 2026 sales fell 11% as lower unit shipments more than offset pricing gains. Startup issues at the new warehousing facility disrupted shipments and added about $2.4 million of costs during the period. The Safety segment also remains a drag, with limited revenues and negative gross margins due to the startup nature of its businesses. Meanwhile, Defense carries exposure to government spending and funding decisions, while its fixed-price contracts can limit recovery of higher input costs.

National Presto’s Valuation

From a valuation perspective, National Presto appears relatively expensive. Currently, NPK is trading at 1.97X trailing 12-month EV/sales value, above the industry’s average of 1.44X. However, the metric remains lower than the company’s peers, including GPGI (31.63X) and Carlisle (3.14X).

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Conclusion

Overall, National Presto’s expanding Defense backlog, new contract awards, capacity investments and strong liquidity support its growth outlook, though investors should remain mindful of weakness in the Housewares/Small Appliances business and early-stage Safety operations. 

Its valuation is higher than the industry average. For long-term investors, NPK’s strong fundamentals may justify holding the stock, but investors looking to add the stock to their portfolios may want to wait for a better entry point.

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This article originally published on Zacks Investment Research (zacks.com).

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