Boosted by its Connected Operations Cloud, Internet of Things leader Samsara has landed a spot on the IBD 50 list of top growth stocks and the IBD Leaderboard watchlist. On top of that, here are five more reasons why Wall Street has its eye on the Palantir Technologies peer, including how Samsara stock — Tuesday's IBD Stock Of The Day — stands poised to launch a new breakout.
1. Samsara Stock In Top-Ranked Group
Based in San Francisco, Samsara provides a platform that enables organizations to harness Internet of Things (IoT) data to develop actionable insights and improve their physical operations. The cloud-centric company works across a wide range of industries, from construction and field services to utilities and transportation.
Samsara earns the highest-possible 99 Composite Rating. The stellar rating shows it is outpacing 99% of all companies in terms of key stock-picking factors. The stock shares top billing among a slew of industry peers, including Palantir, Enfusion, Shopify and IPO Leader Klaviyo.
Several of these companies are showcased on IBD's top stock lists. Palantir and Klaviyo join Samsara on the IBD 50, as does Shopify. Palantir and Shopify also make the IBD Big Cap 20.
Plus, the enterprise software industry group – which houses Samsara, Palantir and the others – ranks a strong No. 10 out of the 197 groups IBD tracks. That is a positive since the best stocks often hail from the top-ranked industry groups.
2. Forecasts Call For 217% Earnings Growth
Samsara turned its first ever annual profit for its fiscal year ended in January 2024. Wall Street now forecasts earnings growth of 217% in fiscal 2025 before slowing to still-strong growth of 27% the following year.
Revenue gains have been strong and steady. Over the last eight quarters, Samsara has generated sales growth ranging from 36% to 48%. The company will report results for the fourth quarter of fiscal 2025, ended Feb. 1, on March 6. Analysts expect sales growth of 21% to $335.4 million.
3. Samsara Stock In Demand
Samsara continues to show clears signs of institutional demand. The stock sports a B+ Accumulation/Distribution Rating, as well as eight quarters of rising fund ownership. Plus, 69 funds with an A+ rating from IBD own shares.
4. Rising Relative Strength Shows Market Leadership
Ahead of a potential breakout, Samsara's relative strength line continues to rise, closing in on a 52-week high. Such action shows the stock is outpacing the benchmark S&P 500.
The RS lines for industry peers Palantir and Klaviyo have also soared.
5. Breakout Nears For Samsara
While Palantir and Klaviyo have climbed out of buy range, Samsara stands on the verge of a breakout. Shopify remains in buy range.
Samsara has formed a second-stage cup pattern showing a 57.51 buy point. In another sign of rising technical strength, its 21-day exponential moving average has just climbed back above its longer-term 50-day line.
Up for a seventh straight day Wednesday, Samsara showed resilience, coming off the day's lows to close with a gain.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
