Samsara (IOT) stock plunged 14% out of the gate Friday even after cloud company beat analysts' top- and bottom-line expectations for its fiscal first quarter and raised its full-year outlook.
In the three months ended May 4, Samsara saw its revenue increase 37.4% year-over-year to $280.7 million, while its ending annual recurring revenue (ARR) jumped 37.3% to reach $1.2 billion. Earnings came in at 3 cents per share, up from a loss of 2 cents per share in the year-ago period.
"We delivered a strong first quarter of the new fiscal year," Samsara co-founder and CEO Sanjit Biswas said in a statement. "As the strategic partner to the world's leading and most complex physical operations organizations, we are focused on delivering clear and fast return on investment (ROI) for our customers and improving their operations."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results handily beat analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $272 million and earnings of 1 cent per share.
As a result of its strong start to fiscal 2025, Samsara raised its outlook for the full year. The company now anticipates revenue in the range of $1.205 billion to $1.213 billion and earnings per share to arrive between 13 cents to 15 cents. This is up from its previous guidance of revenue in the range of $1.186 billion to $1.196 billion and earnings in the range of 11 cents to 13 cents per share.
Is Samsara stock a buy, sell or hold?
The tech stock is down nearly 10% for the year to date, but analysts remain upbeat. According to S&P Global Market Intelligence, the consensus analyst target price for IOT stock is $40.83, representing implied upside of more than 35% to current levels. Meanwhile, the consensus recommendation is a Buy.
William Blair analyst Dylan Becker is one of those with an Outperform (Buy) rating on IOT stock.
"Samsara reported a strong start to the year with results ahead of expectations and a full-year outlook raised by more than the quarterly performance," Becker wrote in a June 7 report. The analyst says the stock's post-earnings weakness can be attributed "to overblown expectations and the company's rich multiple. Longer term we believe Samsara's rare combination of fast revenue growth and margin improvement will drive outperformance to the market."
Related Content
-
Stock Market Today: Have We Seen the Bottom for Stocks?Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Is the GOP Secretly Planning to Raise Taxes on the Rich?Tax Reform As high-stakes tax reform talks resume on Capitol Hill, questions are swirling about what Republicans and President Trump will do.
-
Stock Market Today: Have We Seen the Bottom for Stocks?
Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Social Security Is Taxable, But There Are WorkaroundsIf you're strategic about your retirement account withdrawals, you can potentially minimize the taxes you'll pay on your Social Security benefits.
-
Serious Medical Diagnosis? Four Financial Steps to TakeA serious medical diagnosis calls for updates of your financial, health care and estate plans as well as open conversations with those who'll fulfill your wishes.
-
What Wall Street's CEOs Are Saying About Trump's TariffsWe're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
-
To Stay on Track for Retirement, Consider Doing ThisWriting down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
-
How to Make Changing Interest Rates Work for Your RetirementHigher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
-
When to Sell Your StockKnowing when to sell a stock is a major decision investors must make. While there's no one correct answer, we look at some best practices here.
-
Within Five Years of Retirement? Five Things to Do NowIf you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
