Samsara Inc (IOT) shares surged 14% premarket after the company reported quarterly earnings that topped analyst consensus expectations.
The company reported third-quarter earnings of $0.04 per share, $0.03 better than the analyst estimate of $0.01. Revenue for the quarter came in at $237.5 million, up 40% YoY and above the consensus estimate of $224.65 million.
IOT had an ending ARR of $1.003 billion, representing a 39% increase, while it also reported 1,663 customers with ARR over $100,000, up 49% year-over-year.
“We achieved an important milestone this quarter as we surpassed $1 billion in ARR in just our eighth year of selling,” said Sanjit Biswas, CEO and co-founder of Samsara.
Looking ahead, the company sees Q4 earnings between $0.02 and $0.03 per share, versus the consensus of $0.02, with revenue for the period from $257 million to $259 million, versus the consensus of $250.4 million.
For FY2024, it sees earnings per share from $0.05 to $0.06 versus the consensus of $0.02 and revenue between $918 million and $920 million versus the consensus of $898.7 million.
Reacting to the report, analysts at Morgan Stanley said the company reporting durable 30%+ growth, expanding margins, and consistent execution places it in an "exclusive group of increasingly scarce assets."
"Amid a backdrop of mixed sentiment and large-cap outperformance YTD, one of the high-quality assets in SMID-cap continues to stand out, justifying the valuation premium," said the analysts, who maintained an Equal-Weight rating and $31 price target on the stock.
Analysts at Wells Fargo, who raised the price target for the stock to $34 from $32, said the company is crossing the $1 billion mark in ARR at an "impressive clip."
"We think the premium is deserved given scarcity of outsized growth + recent margin improvements," said the analysts, maintaining an Overweight rating on the stock.