Samsara is Tuesday's pick for IBD 50 Growth Stocks To Watch as the Internet of Things stock forms a new base. Samsara stock is quickly rebounding from June lows.
The company has expanded from transportation fleet software that tracks vehicles to monitoring industrial equipment and government operations with its Internet of Things (IoT) platform.
Samsara Stock Claws Back, Forms New Base
Samsara stock is in a stage-one cup base with a 42.27 buy point. The base count reset when the current base undercut a prior cup base that formed from March to early May. The new cup base makes it five back-to-back bases since June 2023, most of them resulting in modest gains from their buy points.
Shares dropped 33% from mid-May to mid-June as they sliced through the 50-day moving average. Samsara stock dropped after the company reported better-than-expected fiscal first-quarter adjusted earnings and sales on June 6.
But the Internet of Things stock has been rebounding just as dramatically as it has been falling. It's trying for its 15th up day over the last 19 sessions. The stock has gained nearly 40% from its low of 27.14 on June 16. It reclaimed its 50-day line last month. Samsara stock is heading back to its resistance level around 40.
Profit Growth Looks Bright
Samsara reported fiscal Q1 adjusted earnings of 3 cents a share on 37% revenue growth. Quarterly sales growth slowed from the 40%-52% range over the prior seven quarters. Estimates call for 30%-32% sales growth over the next three quarters, according to MarketSurge.
"We delivered a strong first quarter of the new fiscal year with Q1 revenue of $280.7 million, growing 37% year-over-year, the same year-over-year adjusted revenue growth as last quarter (but) at a larger scale," said Sanjit Biswas, CEO and co-founder of Samsara, in the earnings release.
Samsara forecast fiscal second-quarter revenue of $288 million to $290 million, with adjusted profit ranging from break-even to a penny a share. It also raised its fiscal 2025 revenue forecast to $1.205 billion to $1.213 billion from its previous guidance of $1.186 billion to $1.196 billion.
FactSet estimates show earnings per share of 13 cents in fiscal 2025 (ending next January) and 23 cents in fiscal 2026.
Mutual funds have been adding Samsara stock, with 631 funds owning shares in June, up from 564 in March and 376 in December.
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