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
-
Wall Street Is Worried About Apple Stock. Should You Be Too?Analysts expect Trump's sweeping tariffs to have an outsized impact on Apple stock. How concerned should investors be?
-
Machine Learning in Finance: Real-World Applications and ChallengesControlling machine learning in a finance environment requires stakeholders' commitment to creating a strong ethical foundation.
-
Wall Street Is Worried About Apple Stock. Should You Be Too?Analysts expect Trump's sweeping tariffs to have an outsized impact on Apple stock. How concerned should investors be?
-
The Stock Market Is Selling Off. Here's What Investors Should DoInvestors are fleeing the equities market en masse in response to the Trump administration's "jaw-dropping" tariffs. But the experts say don't panic.
-
How Building Liquidity Into Your Retirement Plan Can Pay OffTo succeed in investing for retirement, you need time and discipline — liquidity can give you both.
-
Striking Oil in Opportunity Zones: Now Might Be the Best Time to InvestYou could unlock hidden wealth in QOZs with strategic oil and gas investments, potentially combining tax advantages with long-term growth in an essential industry.
-
Stock Market Today: It's the Old Up-Down Again on Liberation DayMarkets look forward to what comes with the reordering of 80-year-old global trade relationships.
-
Can a New Manager Cure Vanguard Health Care Fund?Vanguard Health Care Fund has assets of $40.5 billion but has been ailing in recent years. With a new manager in charge, what's the prognosis?
-
What You Don't Know About Annuities Can Hurt YouLack of awareness leads many to overlook these potent financial tools, and with the possibility of running out of money in retirement, that could really hurt.
-
Three Keys to Logical Investing When Markets Are VolatileFocusing on these market fundamentals can help investors stay grounded rather than being swayed by emotion or market hysteria.
