Shares in Samsara surged Friday on fourth-quarter earnings and revenue that topped Wall Street targets. Also, the company's revenue outlook came in above expectations, helping boost IOT stock.
For the quarter ended Jan. 31, San Francisco-based Samsara reported a loss of 2 cents per share on an adjusted basis vs. a 5-cent loss a year earlier. Meanwhile, revenue rose 48% to $186.6 million, the company said.
Analysts expected Samsara to record a 5-cent loss on sales of $171.2 million.
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Goldman Sachs analyst Kash Rangan on Friday upgraded IOT stock to buy from neutral. "Samsara has equal opportunities in both replacement markets and to drive deeper market penetration with net new customers," he said in a report.
Rangan added: "Samsara's business currently comes mostly from fleets (90% of annual recurring revenue) and the company's entry into industrial equipment/sites (10% 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 durable 20%-plus top-line growth."
Subscription software-based annual recurring revenue increased 42% year-over-year to $795.1 million. Further, that topped analyst estimates by 3%.
"Strength was led by larger deals, an uptick in new customer wins and continued multiproduct strength across telematics, safety, driver workflows and equipment," said Derrick Wood, a TD Cowen analyst, in a report. "Management outlined that despite some macro headwinds in the form of longer sales cycles, sales productivity and close rates have remained relatively stable."
IOT Stock: Outlook Above Views
For the current quarter, Samsara said it expects revenue of $191 million at the midpoint of its outlook. IOT stock analysts had projected revenue of $181 million.
IOT stock surged 15.4% to close at 19.48 on the stock market today. Also, Samsara stock ranks No. 12 in the IBD 50 roster of growth companies.
Heading into the Samsara earnings report, the company owned a Relative Strength Rating of 18 out of a best-possible 99, according to IBD Stock Checkup.
Founded in 2015, Samsara provides sensors and cloud-based software to manage vehicle fleets and industrial operations. Further, its "Internet of Things" platform provides GPS tracking for trucks, and monitors routes and vehicle performance.
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