The stellar bull run in Samsara (NYSE:IOT) stock continues, with the company delivering better-than-expected Q1 financials. Samsara stock has gained over 96% year-to-date as demand for its offerings remains strong despite economic uncertainty. However, according to analysts, its valuation could play spoilsport and limit the upside.
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The company, which helps enterprises leverage IoT (Internet of Things) data and AI (Artificial Intelligence) to improve their operations, has witnessed rapid growth led by an increase in its large customer base (customers with $100K in annual recurring revenue, or ARR).
During the recently reported quarter, Samsara stated that its ending ARR of $856.2 million reflects 41% year-over-year growth. Further, in Q1, Samsara added a record 138 large customers, bringing the total to 1,375 customers with more than $100K in ARR.
It delivered revenues of $204.3 million in Q1, up 43% on a year-over-year basis. Further, its adjusted net loss of $0.02 per share improved compared to the prior-year period.
Following the Q1 financials, BMO Capital analyst Daniel Jester increased IOT’s price target to 23. On June 2, Jester highlighted the continued strength in the company’s ARR growth. However, he maintained a Hold rating on IOT stock due to its expensive valuation.
Along with Jester, Piper Sandler analyst James Fish raised IOT’s price target to $23 following the Q1 earnings report. However, he remains sidelined on the stock, citing valuation concerns.
Is Samsara Stock a Good Buy?
Samsara’s business remains strong with continued growth in is large customer base. However, the stock has rallied quite a lot, driving its valuation higher, which keeps analysts cautiously optimistic.
Samsara stock has four Buy and five Hold recommendations, translating into a Moderate Buy consensus rating. Meanwhile, analysts’ average price target of $24.11 implies 0.82% downside potential.
According to TipRanks’ data, Matthew Hedberg of RBC Capital is the most accurate analyst for Suncor stock. Copying Hedberg’s trades on IOT stock and holding each position for one year could result in 84.62% of your transactions generating a profit, with an average return of 39.48% per trade.
