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On Friday, Truist Securities adjusted its outlook on Samsara Inc (NYSE:IOT), increasing the price target to $40 from the previous $35, while keeping a Hold rating on the stock. The adjustment comes after Samsara showcased a strong second quarter in fiscal year 2025, surpassing both the analyst's and the Street's expectations for Annual Recurring Revenue (ARR), a key indicator of the company's performance.
Samsara ended the quarter with an ARR of $1.26 billion, marking a 36% year-over-year increase and exceeding the consensus estimate of $1.25 billion, which predicted a 34% rise. This robust growth prompted the company to revise its revenue forecast and profitability outlook for the year upward.
The firm's analyst acknowledged Samsara's impressive quarter, stating that the company's performance not only met but exceeded expectations. The results have strengthened the belief in Samsara's potential for sustained growth and margin improvement over the long term.
Despite the positive outlook, the analyst cited current market valuations as a reason for maintaining the Hold rating, indicating that the firm does not recommend investing additional funds in the stock at its current price levels.
In light of these developments, Truist Securities has updated its estimates for Samsara, reflecting the increased confidence in the company's financial trajectory. The revised price target of $40 is indicative of the firm's recalibrated expectations following Samsara's successful quarter and optimistic guidance for the remainder of the fiscal year.
In other recent news, Samsara Inc. delivered a strong performance in its second quarter, outperforming analyst estimates. The company reported an adjusted earnings per share of $0.05, surpassing the consensus of $0.01. Additionally, Samsara's revenue for the quarter reached $300.2 million, exceeding the anticipated $289.53 million and marking a 37% YoY increase. The company's Annual Recurring Revenue (ARR) also saw significant growth, reaching $1.264 billion, a 36% YoY rise.
Samsara also reported an increase in its customer base, with 2,133 customers having an ARR over $100,000, a 41% YoY growth. CEO and co-founder, Sanjit Biswas, noted the company's achievement of collecting over 10 trillion data points annually on the Samsara platform.
Looking forward, Samsara provided its third-quarter fiscal 2025 guidance, expecting an EPS between $0.03 and $0.04 and revenue projections in the range of $309-311 million. These estimates slightly surpass the analyst consensus of $0.03 EPS and $308.8 million in revenue.
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