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Samsara Surges 41% YTD: How Should You Approach the Stock?
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Samsara (IOT - Free Report) shares have increased 40.8% in the year-to-date period compared with the Zacks Computer & Technology sector’s rise of 19.9% and the Zacks Internet - Software sector’s rise of 14.2%.The uptick can be attributed to Samsara’s expanding clientele and strong partner base.
Samsara’s momentum in customer acquisition during the second quarter of fiscal 2025 is evident as it added 169 customers with more than $100,000 in Annual Recurring Revenues (ARR), reflecting sustained growth.
The expansion included an impressive record of 14 customers with more than $1 million in ARR, underscoring the increasing adoption of its platform by large enterprises.
IOT concluded the fiscal second quarter with an ARR of $1.26 billion, up 36% year over year.
However, the question investors should ask is whether this bull run will continue for Samsara’s shares or not.
Will IOT Benefit From a Strong Portfolio?
IOT is experiencing strong growth as a result of the ongoing digitization wave, leveraging its advanced AI solutions to benefit various industries. This includes construction, food and beverage, transportation, warehousing and agriculture.
In August, Samsara’s advanced AI solutions enhanced Lanes Group’s fleet safety, leading to a 72% increase in driver safety scores, a 92% reduction in mobile phone usage and a £3,000 decline in average claim value within just eight months.
Samsara also expanded its clientele by partnering with AT&T (T - Free Report) to enhance its offerings for public safety customers.
In June, Samsara introduced new products and solutions at its Beyond conference, including a FirstNet Trusted Vehicle Gateway for enhanced public safety communications through AT&T’s network.
Samsara's strong growth and adoption of its video-based safety, vehicle telematics, and equipment monitoring products have also been noteworthy.
In the second quarter fiscal 2025, Samsara’s Video-Based Safety and Vehicle Telematics apps each surpassed $500 million in ARR, with Equipment Monitoring and other products exceeding $150 million, all growing more than 30% year over year.
The company empowered United Natural Foods (UNFI - Free Report) to drive sustainability and safety advancements across its extensive operations, like fleet management, on the back of its solutions.
In April, Samsara announced that United Natural Foods chose Samsara to drive sustainability and safety progress by adopting its Vehicle Telematics, Asset Gateways, Environmental Monitors and Video-Based Safety solutions.
IOT Q3 Guidance Positive
For third-quarter fiscal 2025, Samsara expects revenues to be between $309 million and $311 million, suggesting 30-31% year-over-year growth. Non-GAAP earnings are expected to be between 3 cents and 4 cents.
The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is currently pegged at $310.65 million, suggesting 30.78% growth year over year.
The consensus mark for earnings is currently pegged at 4 cents, increased by a penny in the past 30 days.
IOT Stock – Buy, Sell or Hold?
Samsara stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
The forward 12-month Price/Sales ratio for IOT stands at 23.75X, higher than its Zacks Internet - Software sector’s 3.11X, reflecting a stretched valuation.
IOT currently carries Zacks Rank #3 (Hold) suggesting that it may be wise to wait for a more favorable entry point in the stock.
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Samsara Surges 41% YTD: How Should You Approach the Stock?
Samsara (IOT - Free Report) shares have increased 40.8% in the year-to-date period compared with the Zacks Computer & Technology sector’s rise of 19.9% and the Zacks Internet - Software sector’s rise of 14.2%.The uptick can be attributed to Samsara’s expanding clientele and strong partner base.
Samsara’s momentum in customer acquisition during the second quarter of fiscal 2025 is evident as it added 169 customers with more than $100,000 in Annual Recurring Revenues (ARR), reflecting sustained growth.
The expansion included an impressive record of 14 customers with more than $1 million in ARR, underscoring the increasing adoption of its platform by large enterprises.
IOT concluded the fiscal second quarter with an ARR of $1.26 billion, up 36% year over year.
Samsara Inc. Price and Consensus
Samsara Inc. price-consensus-chart | Samsara Inc. Quote
However, the question investors should ask is whether this bull run will continue for Samsara’s shares or not.
Will IOT Benefit From a Strong Portfolio?
IOT is experiencing strong growth as a result of the ongoing digitization wave, leveraging its advanced AI solutions to benefit various industries. This includes construction, food and beverage, transportation, warehousing and agriculture.
In August, Samsara’s advanced AI solutions enhanced Lanes Group’s fleet safety, leading to a 72% increase in driver safety scores, a 92% reduction in mobile phone usage and a £3,000 decline in average claim value within just eight months.
Samsara also expanded its clientele by partnering with AT&T (T - Free Report) to enhance its offerings for public safety customers.
In June, Samsara introduced new products and solutions at its Beyond conference, including a FirstNet Trusted Vehicle Gateway for enhanced public safety communications through AT&T’s network.
Samsara's strong growth and adoption of its video-based safety, vehicle telematics, and equipment monitoring products have also been noteworthy.
In the second quarter fiscal 2025, Samsara’s Video-Based Safety and Vehicle Telematics apps each surpassed $500 million in ARR, with Equipment Monitoring and other products exceeding $150 million, all growing more than 30% year over year.
The company empowered United Natural Foods (UNFI - Free Report) to drive sustainability and safety advancements across its extensive operations, like fleet management, on the back of its solutions.
In April, Samsara announced that United Natural Foods chose Samsara to drive sustainability and safety progress by adopting its Vehicle Telematics, Asset Gateways, Environmental Monitors and Video-Based Safety solutions.
IOT Q3 Guidance Positive
For third-quarter fiscal 2025, Samsara expects revenues to be between $309 million and $311 million, suggesting 30-31% year-over-year growth. Non-GAAP earnings are expected to be between 3 cents and 4 cents.
The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is currently pegged at $310.65 million, suggesting 30.78% growth year over year.
The consensus mark for earnings is currently pegged at 4 cents, increased by a penny in the past 30 days.
IOT Stock – Buy, Sell or Hold?
Samsara stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
The forward 12-month Price/Sales ratio for IOT stands at 23.75X, higher than its Zacks Internet - Software sector’s 3.11X, reflecting a stretched valuation.
IOT currently carries Zacks Rank #3 (Hold) suggesting that it may be wise to wait for a more favorable entry point in the stock.
AEYE Stock is A Better Pick
AudioEye (AEYE - Free Report) is another top-ranked stock in the broader sector, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AEYE has a Growth Score of A. Its long-term earnings growth rate is currently pegged at 25%.