What Happened?
Shares of ioT solutions provider Samsara (NYSE: IOT) fell 2.6% in the morning session after 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.
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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 3 days ago when the stock gained 18% on the news that the company reported strong second-quarter financial results that surpassed analyst expectations and raised its full-year outlook. The software platform company announced second-quarter revenue of $391.5 million, a 30.4% increase year-over-year that beat estimates of $372.3 million. Adjusted earnings per share came in at $0.12, significantly higher than the consensus estimate of $0.07. The company's annual recurring revenue also grew by 29.8% to $1.64 billion, driven by strong customer acquisition, adding 133 enterprise customers who pay more than $100,000 annually.
Looking ahead, Samsara lifted its full-year guidance. The company now expects revenue of $1.58 billion at the midpoint and raised its adjusted earnings per share outlook to $0.46 at the midpoint. This positive forecast reflects the company's strong performance in demand, profitability, and customer expansion.
Samsara is down 5.1% since the beginning of the year, and at $41.73 per share, it is trading 31.5% 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 $1,689.
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