June 2, 2023

Sell Samsara (IOT) For 20%-Plus Gain In 3 Months

I plucked Samsara (IOT) off our Watch List in early March after the company’s strong earnings report, hoping to grab a bigger upside move. Since then, the stock has been up and down some and closed yesterday right around our entry price. Today we’re enjoying a nearly 30% rally on the back of yesterday’s earnings report. The stock is now back above its December 2021 IPO price and about 15% from its all-time closing high.

Revenue was up 43% to $204.3 million while EPS of $0.02 beat by 3 cents. The company is seeing strength in non-transportation industries, utilities and energy and supply chain improvements. Full-year guidance got a small boost, but there are still questions around what the U.S. transportation market will look like this year. So, while a lot of analysts see this as a better quarter than expected for IOT, it’s not a slam dunk that the rest of the year will go as well as Q1 did.

Let’s go ahead and book a roughly 24% gain. While we could be leaving some “on the table” here it’s hard to argue with a 20% plus gain in three months, especially on such a big move. SELL

Tyler Laundon

Tyler Laundon is chief analyst of the limited-subscription advisory, Cabot Small-Cap Confidential and grand slam advisory Cabot Early Opportunities. He has spent his entire career managing, consulting and analyzing start-up and small-cap companies. His hands-on experience has taught Tyler that the development of a superior business model is the biggest factor in determining a company’s long-term success. Accordingly, his research focuses on assessing the viability of management’s growth strategies, trends in addressable markets and achievement of major developmental milestones.