What Happened?

Shares of internet of Things company Samsara (NYSE:IOT) fell 14% in the morning session after the company reported weak fourth quarter results: its billings missed, and its full-year revenue guidance only met expectations. On the other hand, Samsara's optimistic full-year EPS guidance blew past analysts' expectations. In addition, its revenue, EPS, and EBITDA outperformed Wall Street's estimates. Overall, this quarter had some key positives. The stock's reaction suggested markets focused on the negative aspect.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Samsara? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Samsara’s shares are quite volatile and have had 17 moves greater than 5% over the last year. But moves this big are rare even for Samsara and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 6 months ago when the stock gained 17.2% on the news that the company reported a "beat and raise" quarter. Samsara beat analysts' revenue, adjusted operating income, and EPS expectations this quarter. Notably, the top line grew by 37% year on year, benefiting from expansion from existing customers and new business wins. The company's investment in new products paid off, with Asset Tags (like a tracking device) driving approximately $1 million in net new ACV (annual contract value) in the first quarter of sales. Looking ahead, it raised its full-year guidance for revenue, adjusted operating income, and EPS. Overall, this was a splendid quarter.

Samsara is down 21% since the beginning of the year, and at $34.75 per share, it is trading 43% below its 52-week high of $60.96 from February 2025. Investors who bought $1,000 worth of Samsara’s shares at the IPO in December 2021 would now be looking at an investment worth $1,407.

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