Samsara Takes Internet of Things Solutions to the Next Level

Samsara Inc. (NYSE: IOT) is a leading Internet of Things (IoT) solutions provider. It offers a cloud-based platform that enables companies to connect, manage, analyze, and derive real-time operational insights from their physical asset data. Samsara provides turn-key solutions for hardware and software, including video telematics, GPS tracking, sensors, and environmental monitoring.

The computer and technology sector leader is in a competitive field up against players like Impinj Inc. (NASDAQ: PI), Trimble Inc. (NASDAQ: TRMB) and even hyperscalers like Alphabet Inc. (NASDAQ: GOOGL) Google Cloud IoT Core.

Samsara Is Experiencing Robust Growth  

Samsara offers its Connected Operations cloud. It defines Connected Operations as organizations that manage physical operations using digital technology to connect their assets to the Samsara cloud. This can provide them with real-time visibility both physically and analytically to enhance efficiency and safety.

Samsara has rapidly grown its fleet management customer base to include half of the top ten transportation, waste management, and chemical carrier companies, six of the top ten construction companies, four of the top ten grocers, and three of the top ten wholesale and retail companies.

Samsara IoT Industry Use Cases

The use cases for Samsara’s IoT solutions are broad and easy to understand.

• Transportation and Logistics: IoT solutions include real-time GPS tracking for route optimization and fleet visibility. AI dash cams monitor drivers, and telematics data reduce accidents. Electronic log-in devices (ELD) streamline driver workflow management and meet compliance standards. Delivery giant DHL was able to increase driver retention by 50%.
• Construction: IoT solutions enable utilization monitoring and data for heavy machinery and equipment as well as track assets. Video and environmental monitoring enhances worker safety, preventing accidents and meeting regulatory compliance. Remote diagnostics and predictive and preventative maintenance enable equipment optimization. Clark Construction utilizes Samsara's IoT solutions for site visibility, safety and equipment monitoring.
• Manufacturing: IoT solutions are used for inventory management, real-time visibility of production processes and equipment performance. Sensor data is used for predictive and preventative maintenance to minimize downtime and optimize asset utilization. Global automotive supplier Faurecia uses Samsara IoT solutions for monitoring and predictive maintenance.
• Food and Beverage: IoT solutions enable fleet tracking and cold chain monitoring for temperature-sensitive food and beverage cargo. Optimizing vehicle tracking and routing helps ensure efficient and timely deliveries. Driver safety monitoring helps reduce accidents and protect drivers and cargo. Global foodservice distributor Sysco Co. (NYSE: SYY) uses Samsara IoT solutions for fleet management, temperature monitoring, and driver safety enhancement.

Samsara’s Momentum Continues to Accelerate

Growth is apparent and evident with Samsara. It reported fiscal Q2 2025 EPS of 5 cents, beating analyst consensus expectations by 4 cents. Revenues surged 36.9% YoY to $300.2 million, beating $289.53 million consensus estimates. Its annual recurring revenues (ARR) rose 36% YoY to $1.264 billion. Its customers with ARR over $100,00 rose 41% YoY to 2,133.

Samsara Issues Upside Guidance for Fiscal 2025

The company provided upside guidance for the fiscal full year 2025. It expects EPS of 16 to 18 cents versus 13 cents consensus estimates. Revenues are expected to be between $1.224 billion and $1.228 billion versus the consensus estimates of $1.21 billion.

Samsara CEO Sanjit Biswas commented on the quarter, “Q2 ended at $1.264 billion in ARR, growing 36% year-over-year, and at a quarterly record non-GAAP operating margin. As we grow our business, our data asset also scales. We’re proud to have achieved an important company milestone this quarter—we now collect more than 10 trillion data points annually on the Samsara platform.”

IOT Stock Attempts an Ascending Triangle Breakout

An ascending triangle is a bullish pattern comprised of a flat-top upper trendline resistance converging with an ascending lower trendline representing higher lows. The breakout occurs when the stock surges through the upper trendline.

IOT triggered an ascending triangle breakout following its earnings release. IOT gapped just above its flat-top upper trendline resistance at $42.37 and proceeded to peak at a 52-week high of $45.43. The upper trendline now becomes a floor that needs to be held as support for pullbacks for the breakout to an uptrend. The gap fill levels are at $42.37 and $39.35. The daily relative strength index (RSI) is bounced back up to the 65-band. Fibonacci(Fib) pullback support levels are at $39.75, $37.60, $34.59, and $32.44.

Samsara’s average consensus price target is $42.07, and its highest analyst price target sits at $49.00.  

IOT was on the brink of breaking down, testing the ascending trendline heading into earnings. The solid gap-up has to be tested; potentially, a gap can be filled to solidify the move. Bullish investors should be patient and wait for pullbacks at the fib support levels. Using cash-secured puts at the fib levels forces you to wait for a fill and collect some premium while waiting.

Further income can be derived by writing covered calls after assignments to execute a wheel strategy.

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