BNP Paribas Exane raises Samsara stock price target on growth

BNP Paribas Exane has increased its price target for Samsara Inc (NYSE:IOT) stock from $40 to $55, while maintaining an "Outperform" rating. The current trading price for the stock is $40.20, with analysts offering target prices ranging from $39 to $60, indicating a potential upside of 33% from the consensus target. The firm highlighted Samsara's impressive second-quarter net new annual recurring revenue growth, which was the second fastest in the past ten quarters.

The company's positive trajectory supports the firm's confidence in Samsara's 30% top-line growth potential.

Samsara reported robust revenue growth of 29.5% over the past year, maintaining a strong gross profit margin of 76.43%. Notably, 16 analysts have revised their earnings estimates upward for the upcoming period. The firm observed strong momentum among large customers with annual recurring revenue of $1 million or more, and noted that wins and expansions in the public sector have exceeded expectations.

However, the firm anticipates a slight slowdown in net new annual recurring revenue growth in the near term due to tougher comparables, yet expects continued acceleration in annual recurring revenue. The new price target of $55 is based on 13 times the calendar year 2027 sales, compared to the previous target of $40 based on 10 times sales. The increase in the price target reflects BNP Paribas Exane's revised estimates, although GAAP estimates are slightly lower due to higher stock-based compensation.