IBD 50 growth stock Samsara is in a cup base with a buy point at 30.91. The buy point is also the stock's all-time high. IOT is today's IBD 50 Growth Stock To Watch.
The growth stock has a solid Composite Rating of 93 and an RS Rating of 97.
Samsara has seen strong sales growth, though the company has not been profitable for the past seven quarters. Thus, its EPS Rating lags at 57. For the most recent quarter, sales of $204.3 million grew 43% from a year earlier, while a loss of 2 cents per share was an improvement from a 5-cent loss a year ago. Customers with annual recurring revenue of over $100,000 grew 53% to 1,375 during the quarter from the year-ago period.
Shares broke out of consolidation on June 2 in strong volume after earnings and reached their all-time high on June 9, according to IBD MarketSmith. Shares have more than doubled so far this year.
For the second quarter, the enterprise software company expects sales of $206 million to $208 million, or growth of 34%-35%. For the full year, it gave revenue guidance of $866 million to $874 million, which would be 33%-34% growth. The release of Q2 results is estimated for Aug. 31.
Analysts at S&P Capital IQ have views of $207.5 million for the second quarter, which would be up 35%, with a loss of 2 cents per share, which would be half the loss of a year ago.
Growth Stock In Enterprise Software Group
IOT stock is in the enterprise software group, which sits at a lofty No. 16 among IBD's 197 industry groups.
Samsara offers connected data services to businesses that depend on physical operations, such as construction, transportation, retail and wholesale trade as well as utilities. Its Connected Operations Cloud includes a data platform that aggregates data from several IoT devices. It also has AI capabilities for improving business workflow, analytics and other work processes. Samsara also offers credit card processing tools, as well as connectivity tools for sensors and cameras.
In April, it launched fleet management services to improve electrification and reduce emissions through connected data for entire fleets. Its dashboard provides visualization tools for vehicle performance for internal combustion engine (ICE), EV and hybrid vehicles, and for EV charging.
The growth stock went public in December 2021 with shares opening on the NYSE at $23 each. The initial offering raised $805 million.
Mutual funds own 39% of outstanding shares. Fund ownership has been growing over the past six quarters, earning the growth stock a strong Accumulation/Distribution Rating of B. Invesco Discovery Fund (OPOCX) and Fidelity Contrafund (FCNTX) hold shares of IOT.
Among exchange traded funds, the Global X Internet of Things ETF holds shares of Samsara.
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