Samsara is the IBD Stock of the Day as shares find support at a key technical level after a big run-up. Samsara stock has gained nearly 50% in 2024.
On the stock market today, Samsara stock rose 5.6% to close at 50.61. Thursday's gain took out its intraday 52-week high of 50.07.
Samsara reached that high on Sept. 25. It retreated a bit after that, but found support at its 21-day moving average.
Founded in 2015, Samsara provides sensors and cloud-based software to manage vehicle fleets and industrial operations. Also, its Internet of Things platform provides global positioning tracking for trucks, and monitors routes and vehicle performance.
Samsara Stock: Founders
Sanjit Biswas and John Bicket co-founded Samsara in 2015. Earlier they founded Meraki, a Wi-Fi and cloud networking startup. They sold Meraki to Cisco Systems for $1.2 billion in 2012.
Samsara began by selling fleet management software in the transportation industry. By leveraging its Global Positioning System technology along with telematics — sensor data gathered from trucks — Samsara eventually helped customers monitor routes and vehicle performance. That helped them save money on preventive maintenance and fuel usage.
From there, Samsara in 2018 expanded into video-based safety products. Further, these enabled fleet customers to lower vehicle insurance costs.
In-cab, dual-facing cameras provide real-time video streaming. Also, artificial intelligence software at cloud data centers detects high-risk behavior, such as distracted driving and lane departure.
Samsara Stock: Asset Tags A Hit
Many analysts are upbeat about new "asset tags" introduced at an investor conference in June.
BMO Capital Markets analyst Daniel Jester said in a report to clients: "Newly announced Asset Tags extend the company's opportunity beyond vehicle and asset gateways for customers to track a vast assortment of smaller, nonpowered assets ubiquitous inside industrial organizations in a way which will be supportive to Samsara's gross margins."
In the quarter ending Aug. 3, the asset tags generated $1 million in annual contract value.
"Assuming an effective price of $5 per device, the $1 million in net new ACV in Q2 implies 200,000 devices sold," said Morgan Stanley analyst Keith Weiss in a report.
Growing Non-Vehicle Market
William Blair analyst Dylan Becker said in a report: "Samsara continues to see notable momentum across its growing suite of non-vehicle-based offerings like asset tags, equipment monitoring, site visibility, connected workflows, and training. With many customers allocating eight-figures-plus annually toward missing and stolen assets, we believe asset tags provide another opportunity for Samsara to deliver substantial tangible value to customers."
Samsara's second-quarter earnings and revenue topped Wall Street targets amid strong growth in large accounts.
Samsara reported earnings of 5 cents per share on an adjusted basis versus a 1-cent profit a year earlier. Meanwhile, Q2 revenue rose 37% to $300 million, the company said.
Analysts expected Samsara to record 1 cent profit on sales of $289.5 million.
Further, annual recurring revenue from subscriptions rose 36% to $1.26 billion, topping estimates of $1.25 billion.
Samsara Stock Technical Ratings
Samsara stock holds an IBD Composite Rating of 97 out of a best-possible 99, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. Also, the best growth stocks have a Composite Rating of 90 or better.
Further, Samsara stock has an Accumulation/Distribution Rating of B+. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
