Samsara (IOT) – strong but

Samsara (IOT)

We’ll stay in the field of connected data with the next stock Goldman are bullish on. Samsara is another company at the center of the digital transformation theme, more specifically to do with the Internet of Things, as its ticker implies.

Samsara’s connected operations platform is used for tracking fleets of vehicles and other equipment and allows for real-time connectivity between physical assets and people.

The result is automation which improves the longevity of assets, raises employee work rate and safety, and increases the overall effectiveness of the business.

This is another newly listed company; Samsara went public as recently as December, raising $805 million after selling 35 million Class A shares at a price of $23 per share. This gave the IoT player a valuation of $11.5 billion.

But Samsara stock has also taken a hit due to the unfortunate timing of its IPO. The shares are down by 37% since going public, despite dialing in a strong quarterly report – the first since going public.

In Q4, Adj. EPS came in at -$0.5, compared to the analysts’ expected loss of $0.07. Revenue of $125.8 million showed a 65.7% year-over-year uptick, also coming in above the Street’s forecast of $116.4 million.

Samsara’s outlook also came in better-than-expected; the company sees a loss of between $0.07 and $0.08 per share and revenue between $130 million to $132 million in Q1. The Street was looking for a loss of $0.08 and revenue of $124.5 million.

It is still early days for the IoT industry, a fact which bodes well for Samsara, according to Rangan, who notes the company is well-positioned to benefit from the ongoing digital transformation.

“With a TAM of $97bn, Samsara is an emerging leader in IoT (Internet of Things) with a strong competitive moat, in the world of physical operations which represents 40% of US GDP,” the 5-star analyst said. “Samsara’s business currently comes mostly from fleets (92% of ARR) and the company’s entry into equipment/sites (8% of ARR) is in the early days. Addressing a large under-penetrated TAM with a modern platform with both replacement and net new markets in our view positions Samsara for a multi-year 30%+ growth.”

Accordingly, Rangan has a Buy rating for Samsara stock, backed by a $30 price target. Should the figure be met, investors are looking at 12-month returns of 93%.

Rangan is not alone here either with his bullish stance; this stock boasts a Strong Buy consensus rating, based on 8 positive reviews and just one skeptic. The forecast calls for one-year gains of ~80%, given the average price target clocks in at $27.88.