Goldman Sachs maintains buy rating on Samsara stock despite decline

On Friday, Goldman Sachs reaffirmed its Buy rating on Samsara Inc (NYSE: NYSE:IOT) stock, maintaining a price target of $46, within the broader analyst range of $36.80-$60.00. This decision follows the company’s fiscal first-quarter 2026 results, which exceeded consensus expectations in several key areas, including revenue, operating margin, and free cash flow margin. The company maintains impressive gross profit margins of 76.65% and achieved 31.72% revenue growth in the last twelve months. According to InvestingPro, 9 analysts have recently revised their earnings upwards for the upcoming period.

Despite these positive results, Samsara’s stock, currently trading at $47.25 with a market capitalization of $26.9 billion, showed a 13% decline after hours. This drop is attributed to a slowdown in sequential net new annual recurring revenue (NNARR) growth, which decelerated to 5% year-over-year compared to 21% in the same quarter last year. The company also faced challenges from extended sales cycles and worse-than-expected tariff impacts following Liberation Day, affecting net new bookings. For deeper insights into Samsara’s valuation and growth prospects, InvestingPro subscribers can access comprehensive financial analysis and 10 additional ProTips.

Goldman Sachs analysts remain optimistic about Samsara’s ability to manage macroeconomic challenges and achieve its fiscal year 2026 guidance of 24% growth, aligned with InvestingPro’s forecast of 22% revenue growth. Key factors supporting this confidence include record pipeline generation in the first quarter, indicating strong customer demand and a significant market opportunity, as well as sustained momentum in emerging product categories. While the company isn’t currently profitable, analysts predict profitability this year.

Additionally, Samsara’s international performance, particularly in Europe, has shown strong growth, with accelerating sequential NNACV growth. This international momentum is seen as a stable growth driver, especially given its resistance to tariff disruptions.

Goldman Sachs acknowledges Samsara’s premium valuation at 14 times enterprise value to calendar year 2026 sales. The firm anticipates the stock may remain range-bound in the short term until tariff issues are resolved or NNARR growth reaccelerates.

In other recent news, Samsara Inc. reported strong financial results for Q1 FY2026, exceeding analyst expectations. The company announced earnings per share (EPS) of $0.11, surpassing the forecasted $0.05, and achieved a revenue of $367 million, which was above the anticipated $351.56 million. This performance marked a 31% year-over-year revenue growth and was accompanied by a record non-GAAP gross margin of 79%. Samsara also provided guidance for Q2 FY2026, estimating revenue between $371 million and $373 million, reflecting a 24% year-over-year growth. For the full fiscal year, the revenue is expected to be between $1.547 billion and $1.555 billion.

In addition to financial results, Samsara is focusing on expanding its AI-driven solutions and has formed strategic partnerships with major OEMs, including Hyundai (OTC:HYMTF) Translead and Stellantis (NYSE:STLA), to enhance its connected operations platform. These partnerships are expected to facilitate seamless data integration and improve operational efficiency for customers. The company also highlighted its efforts in international markets, with 18% of net new ACV coming from these regions, particularly Europe. Samsara’s ongoing initiatives to leverage AI and expand its ecosystem underscore its commitment to driving growth and innovation in the connected operations space.

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