What Happened?
Shares of ioT solutions provider Samsara (NYSE: IOT) fell 6.7% in the morning session after investors appeared to continue taking profits following the stock's significant rally the previous week.
The stock had previously soared more than 15% after the company reported strong second-quarter results that surpassed Wall Street's expectations. This pullback seems to be a consolidation of those sharp gains and follows a similar drop the previous day. The selling pressure comes despite some neutral-to-positive analyst actions, including Morgan Stanley raising its price target while maintaining an 'Equalweight' rating and Berenberg reiterating its 'Hold' rating. The decline also overshadowed positive company news, as Samsara announced it would equip First Student's fleet of approximately 46,000 vehicles with its technology, a move aimed at setting a new standard for safety in student transportation.
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What Is The Market Telling Us
Samsara’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 2.6% as investors appeared to take profits after the stock's significant rally the previous week. The stock had previously soared more than 15% after the company reported strong second-quarter results that surpassed Wall Street's expectations. Samsara announced earnings per share of $0.12 on revenue of $391.5 million, comfortably beating consensus estimates of $0.07 EPS on $372.3 million in revenue.
The impressive performance led to a wave of positive analyst actions, including an upgrade from 'Hold' to 'Buy' by Craig-Hallum and price target increases from firms like Goldman Sachs and RBC Capital. However, on Monday, Berenberg maintained its 'Hold' rating on the stock, a less bullish stance that may have tempered some of the recent enthusiasm. The pullback appears to be a consolidation after the sharp gains.
Samsara is down 11.8% since the beginning of the year, and at $38.76 per share, it is trading 36.4% below its 52-week high of $60.96 from February 2025. Investors who bought $1,000 worth of Samsara’s shares at the IPO in December 2021 would now be looking at an investment worth $1,571.
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