William Blair initiated research coverage of Samsara Inc. (IOT $22.99). Samsara helps companies digitize their physical operations through its connected operations cloud, which ingests internet of things (IoT) data and provides actionable insights.
Analysts Bhavan Suri and Matthew Pfau estimated the company would generate revenue of $419.5 million in fiscal 2022 (ending January) and $552.2 million in fiscal 2023, with the potential for Samsara to increase revenue at a 30%-plus growth rate over the next several years.
Suri said, “Founded in 2015, Samsara aims to digitize physical operations through its Connected Operations Cloud. The use-cases of this platform are quite broad, and Samsara started with vehicle telematics and then moved into video-based vehicle safety, driver apps and workflows, equipment monitoring, and site visibility. Samsara leverages a software-as-a-service, or SaaS, subscription model, charging for applications on a per asset basis. Samsara’s success in a relatively short period has been quite impressive; the company has achieved a $400 million revenue run-rate faster than many other premier SaaS businesses. Despite this success, we believe Samsara is less than 1% penetrated in its addressable opportunity.”
Pfau added, “We believe there are several tailwinds that should drive adoption of Samsara’s solutions, including digitization of physical operations, increasing compliance and regulations on physical operations, and ESG initiatives. Samsara’s platform can help in all these areas. Although Samsara is not currently profitable, we believe the business has strong unit economics, which should bode well for long-term margins.”
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Current Ratings Distribution (as of 1/9/21)
Outperform (Buy): 77%
Market Perform (Hold): 23%
Underperform (Sell): 1%
Inv. Banking Relationships*
Outperform (Buy): 34%
Market Perform (Hold): 12%
Underperform (Sell): 0%
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