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On Friday, Goldman Sachs analyst Kash Rangan adjusted the price target for Samsara Inc (NYSE: NYSE:IOT) to $50.00, down from $55.00, while maintaining a Buy rating on the stock. The revision follows Samsara’s fiscal fourth quarter 2025 results, which surpassed Consensus estimates in terms of revenue, operating margin (OpM), and free cash flow (FCF). Despite the price target reduction, Rangan reiterated a positive outlook, citing the company’s strong performance. According to InvestingPro data, the stock is currently trading at $41.88, with analyst targets ranging from $44 to $64, suggesting potential upside. The company maintains impressive gross profit margins of 76.12%, though current valuations indicate the stock may be trading above its Fair Value.
Samsara’s fourth-quarter results showed a 4% adjusted revenue increase, a 700 basis point improvement in OpM, and a 13% rise in FCF. Although the stock indicated a 5% drop in after-hours trading, down from an initial 14% low, the analyst believes this reflects investors’ reassurance after adjusting for the previous year’s 14-week quarter compared to the typical 13-week quarter. When considering this adjustment, Samsara’s year-over-year revenue growth for the fourth quarter stands at 35%, only slightly down from 36% in the third quarter, rather than the reported 25%. InvestingPro data shows the company has maintained strong momentum with a 33.26% revenue growth over the last twelve months, though the stock has experienced a 12.16% decline over the past week.
Rangan highlighted several key areas of strength for Samsara, including the emerging product category’s momentum, which saw the highest New Net Annual Contract Value (NNACV) mix in the past ten quarters. Additionally, the company experienced an acceleration in its international growth trajectory, with significant contributions from Mexico and the UK. Furthermore, the Public Sector (PubSec) vertical demonstrated robust year-over-year growth, underscoring the potential for Samsara to increase its market share in this area due to its extensive product portfolio and focus on State and Local customers.
The analyst expressed optimism about Samsara’s future, particularly regarding the potential for free cash flow expansion. The initial outlook for fiscal year 2026 anticipates revenue in line with Consensus and an operating margin that is three percentage points higher. Rangan’s comments suggest confidence in Samsara’s ability to reach multi-billion dollar scale in the medium term, describing the company as a differentiated growth story with significant potential. InvestingPro subscribers can access additional insights, including 12 more ProTips and a comprehensive Pro Research Report that provides deep-dive analysis of Samsara’s financial health, which currently rates as FAIR based on multiple factors including growth, profitability, and momentum scores.
In other recent news, Samsara Inc. reported its fourth-quarter earnings for fiscal year 2025, surpassing analyst expectations with earnings per share (EPS) of $0.11 against a forecast of $0.07. The company also exceeded revenue projections, reporting $346 million for the quarter, which was above the anticipated $335.35 million. Samsara’s full-year revenue reached $1.25 billion, marking a 33% year-over-year growth. Despite these positive financial results, the company’s stock experienced a decline following the earnings announcement. Samsara also introduced significant product innovations, including AI-driven tools, and forecasts continued growth with FY 2026 revenue projected at $1.523-1.533 billion. Additionally, the company is seeing strong momentum with large enterprise customers, which is expected to drive future growth. Samsara’s innovative solutions have led to operational improvements for customers, resulting in significant cost savings. Looking ahead, the company remains optimistic about its growth potential, particularly in international markets like Mexico and the UK.
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