An attractive entry point has opened up in shares of Samsara , according to Piper Sandler. Analyst James Fish upgraded Samsara to overweight from neutral and assigned a price target of $50.That suggests 41.4% upside for the software maker of connectivity software used in dash cams and for GPS fleet tracking. Fish’s upgrade comes after a massive slide in Samsara shares, which dropped more than 16% on Friday after the company gave lackluster first-quarter revenue guidance. The stock is now down roughly 19% year to date. “Our thesis is relatively unchanged: Samsara is a high-quality, durable > 20% growth story that is gaining core fleet share, moving upmarket, and has lots of cross-sell opportunity across Video Safety & Equipment Monitoring/Asset Tags,” Fish wrote in a Sunday note to clients. “Expectations have been high for Samsara the last +6 months and, following FQ4’s print, have largely been reset as investors are realizing +30% is not likely to be sustained,” he continued, adding that “However, we think +20% is easily obtainable over the next few years.” IOT 1Y mountain Samsara stock performance. According to Fish, the overall lackluster momentum behind tech stocks can continue to weigh on Samsara. But the analyst finds the stock still looks attractive right now for several reasons, including: The exposure to company’s operating budgets over IT budgets provides better insulation in the current environment The company’s annual “Beyond” conference in June has historically served as a product announcement and share price catalyst Samsara’s valuation is more compelling and is back to trading at its typical premium to other growth assets “After much patience, we are finally at a more reasonable entry point as expectations have been reset, the model is poised for sales + FCF upside, and risk-reward is more attractive,” Fish said. “While valuation isn’t ‘pound the table’ cheap, we think this is an attractive entry-point for longs to ‘nibble-in.'” Fish added that Samsara faces no material competition, other than a few private telematics companies, as service providers and automakers have struggled to compete with Samsara’s more advanced technology. “While the space is highly fragmented, over the last few years, Samsara has outpaced the market and seen competitors exit or be consolidated,” he said, adding that it “leaves plenty of share gain opportunities” ahead.
