SAMSARA INC. (IOT): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/IOT

Headline

Field	Value
Ticker	IOT
Company	SAMSARA INC.
Current price	$39.20/sh
Composition	United States 86% / Other 14%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	revenue-multiple
EV / sales paid	13.2x
Steady-state operating margin assumed	30.7%
Must persist for	18.7y

The company earns no operating profit yet; the inversion runs on the revenue multiple and an assumed steady-state margin.

Solve inputs: computed at a 13.6% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.8 years.

Reconcile: at the x-ray's 9.3% required return this reads ~8.7 years; the models below use their own rates.

How unusual the bet is: elevated

Reference	Value
vs own history	-1.63σ
sustained it ~10 years at this level	15%
implied end-window share	0%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	16.33x	1	expensive
Earnings	10.68x	2	expensive
Relative	7.44x	3	expensive
Growth	0.94x	3	justifies

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=9)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$16.89	2.32x	yes	FCF base $0.3B, growth 25% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection
DCF Exit Multiple	Growth	$41.85	0.94x	yes	Exit EV/EBITDA: 1567.1x / 1569.1x / 1571.1x (bear / base = today's held flat / bull), 7yr
Relative Valuation	Relative	$5.27	7.44x	yes	P/E 77x (blended: static sector reference 35x + trailing (TTM) 401x), scenarios: 61.6x / 77.0x / 92.4x (bear / base = reference held flat / bull), EV/EBITDA 55x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$1.06	36.98x	yes	BV/sh $2.57, ROE (TTM) 3.8%, ke 9.3% (excluded from median)
Two-Stage Excess Return	Asset	$0.67	58.50x	yes	5yr excess ROE then converge to ke=9.3% (excluded from median)
Discounted Future Market Cap	Growth	$50.78	0.77x	yes	Rev $1.7B, growth 30% (input: historical growth; tapered), Terminal P/S: 9.6x / 12.0x / 14.4x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair Value	Relative	$1.20	32.66x	yes	EPS $0.10, growth 2% (input: historical EPS growth), PEG=205.14 (Overvalued) (excluded from median)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	—	—	no	—
Residual Income	Asset	$0.51	76.85x	yes	BV $2.57 + 5yr PV of (ROE (TTM) 3.8% − Kₑ 9.3%) × BV; BV grows 2.5%/yr (excluded from median)
Graham Number	Asset	$2.40	16.33x	yes	√(22.5 × EPS $0.10 × BVPS $2.57) — Graham's conservative floor
EV/EBITDA Relative	Relative	$0.55	71.26x	yes	EBITDA $0.01B × sector EV/EBITDA 25.0x (excluded from median)
FCF Yield	Earnings	$4.25	9.22x	yes	FCF $234.9M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	—	—	no	—
Ben Graham Formula	Earnings	$3.23	12.13x	yes	EPS $0.10 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$0.12	326.63x	yes	BV $2.57 × (ROIC 0.4% / WACC 9.2%) (excluded from median)
P/Sales Sector	Relative	$23.56	1.66x	yes	Revenue $1.73B × sector P/S 8.0x
PEG Fair Value	Relative	$3.75	10.45x	yes	EPS $0.10 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings Yield	Earnings	$1.08	36.29x	yes	EPS $0.10 / required return 9.3% (Rf 4.3% + ERP 5.0%) (excluded from median)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net cash	$804.3m
Share count CAGR (dilution)	3.7%
Burning cash	no

Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.

Operating profit is negative or near zero and there is no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so interest coverage cannot be computed honestly.

Bullet Takeaways

• Samsara sells a connected-operations platform: sensors and software that put trucks, equipment, and field assets online so companies running the physical economy can see and manage them in real time.
• The defining strength is durable, accelerating growth: ending annual recurring revenue reached $1.991 billion, up 30%, with $1M-plus customers growing ARR 62% year over year.
• The defining risk is the price: only the forward-growth method reaches it, so a buyer is paying for that compounding to persist for well over a decade rather than for current earnings, which only just turned GAAP-positive.

Bull Case

The moat is the part of Samsara that the static valuation methods cannot see, and it is the heart of the bull case. Samsara installs hardware, cameras, gateways, and sensors, into trucks and equipment, then runs the software layer that turns the resulting data into safety scores, maintenance alerts, and route efficiency. Once a fleet operator wires its vehicles with Samsara devices and builds its operations around the dashboards, switching means re-equipping the fleet and retraining the staff. That is a deep, physical lock-in, not a software subscription a customer can cancel and replace over a weekend. The 76.7% gross margin reflects software economics layered on top of that installed base.

The growth proves the moat is widening, not just holding. Ending ARR reached $1.991 billion, up 30% year over year, with net new ARR of $100.7 million in the quarter. The quality of that growth is what matters: ARR from customers spending over $100,000 a year reached $1.2 billion and grew 37%, accelerating for the third straight quarter, while ARR from $1 million-plus customers grew 62%, accelerating for the fourth straight quarter. Land-and-expand businesses live or die on whether existing customers buy more over time, and Samsara's largest accounts are expanding fastest. That is the signature of a platform becoming the system of record for an industry.

The inflection to profitability removes the usual objection to a high-growth software name. Samsara posted GAAP earnings per share of $0.08, its third consecutive quarter of GAAP profitability, and raised full-year guidance. A company growing ARR 30% while turning GAAP-profitable is demonstrating that the growth does not require permanent losses, the question that hangs over most software at this stage. With $804 million of net cash and no debt, Samsara can keep investing in its Operational AI features from a position of strength. The bull case is durable compounding: a platform deepening its hold on the physical economy while its economics improve.

Bear Case

The competitive disruption risk is concrete and named, and it is where the bear case starts. Samsara's platform depends on its IoT devices working with the hardware, software, and wireless standards its customers already use, and the 10-K warns that any failure of those devices to remain compatible "could prevent or delay their implementation of our Connected Operations Platform and require costly and time-consuming" work to fix. The fleet-telematics and connected-equipment market is crowded, with legacy telematics providers, equipment makers building their own connectivity, and other software platforms all chasing the same operators. Samsara is ahead, but the field is full and the customers are price-sensitive industrial buyers, not consumers paying for a premium brand.

The valuation is the larger problem, because the price has run far ahead of what the company earns. Invert the price and it requires Samsara to sustain its growth and lift operating margins to roughly 30% over a horizon stretching beyond fifteen years. Three of the four method families, asset value, earnings power, and peer multiples, all say the stock is richly valued; only the forward-growth method reaches the price. That is a pure durability premium, and the entire case rests on one assumption: that 30%-ish growth persists far longer than growth usually does. Most companies growing at that rate decelerate within a few years as their markets saturate, and if Samsara's growth fades toward 20% and then to the high teens, the multiple that only the growth method can justify compresses hard.

Scaling the business carries its own strain. The company notes that the rising number of customers, IoT devices, and connected assets "has placed additional demands on our resources, systems, and operations", the operational reality behind hypergrowth. The balance sheet is pristine, $804 million of net cash, no debt, so this is not a solvency bear. It is entirely a valuation-and-durability bear: an excellent business whose price requires it to keep being excellent for an unusually long time, with the static methods offering no floor if the growth assumption disappoints.

Valuation

Samsara is the textbook case of a price that only one lens can justify, and naming that pattern is the whole valuation. Three of the four method families, asset value, earnings power, and peer multiples, all read the stock as richly valued. Only the forward-growth method reaches the price. That is not a contradiction in the analysis; it is the defining feature of a durable-compounder premium. The static methods structurally cannot price a business whose value is the next ten years of recurring-revenue growth, so they all land below the price, and the gap between them and the price IS the compounding premium the market is paying.

Work the price backward and the demand becomes specific: Samsara has to sustain rapid growth and expand operating margins toward roughly 30% over a horizon well beyond a decade. The growth method credits that path; the question a buyer underwrites is its duration. The evidence in hand supports the near term, ARR up 30%, the largest customers expanding fastest, GAAP profitability achieved, but duration is the one thing no current print can prove, because it is about years that have not happened yet. The reasonable framing is that the business quality is real and the price has already paid for the quality to persist.

Solvency is a non-issue and slightly beside the point. Samsara holds $804 million of net cash against no debt, so it can fund its growth and its Operational AI investment without raising money, and the modest 3.7% annual share-count creep from stock compensation is the only dilution to note. The balance sheet bounds nothing here because the risk is not financial distress; it is multiple compression. The decisive variable is the durability of the growth rate. At today's price, that durability is not the upside case. It is the base case the buyer is already paying for.

Catalysts

The most recent quarter, the first of fiscal 2027 reported in early June, beat on every line that matters for a growth-software name. Revenue reached $478.8 million, up 31% year over year, net new annual recurring revenue was $100.7 million, and ending ARR hit $1.991 billion, up 30%. The company posted GAAP earnings per share of $0.08, its third consecutive quarter of GAAP profitability, and raised full-year guidance.

The customer-expansion metrics were the standouts and the reason the stock rose after the print. ARR from customers spending over $100,000 a year reached $1.2 billion, up 37% and accelerating for a third straight quarter, while ARR from $1 million-plus customers grew 62%, accelerating for a fourth straight quarter. Acceleration at the high end is the opposite of what a maturing platform usually shows, and it is the core evidence behind the durable-growth thesis.

Analysts responded by nudging price targets higher, citing faster net new ARR growth. The forward catalysts are the cadence of ARR prints and the traction of the company's Operational AI offerings, which management positioned as the next expansion vector. Because the entire valuation rests on growth durability, each quarter's net new ARR is the number that either confirms or undermines the premium the price carries.

Peer Cohorts (Per Segment, With Filing Citations)

Samsara (single segment) (reported)

• PCOR (Procore Technologies, Inc.)
• FY2025 10-K: . Notes to Consolidated Financial Statements Subscription fees are generally due and payable upon receipt of invoice by the Company's customers or within 30 days of the stated billing date. The Company does not provide the customer with the right to take possession of its software products at any time. The Company…
• FY2025 10-K: …part of these consolidated financial statements. 75 Table of Contents Procore Technologies, Inc. Consolidated Statements of Stockholders' Equity Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total Stockholders ' Equity (in thousands, except share amounts)…
• TTAN (ServiceTitan, Inc.)
• FY2025 10-K: …2024-05-15 2024-05-15 0001638826 us-gaap:CommonStockMember ttan:TenderOfferMember 2023-07-01 2023-07-31 0001638826 ttan:TermLoanMember 2024-02-01 2025-01-31 0001638826 us-gaap:TradeNamesMember 2025-01-31 0001638826 ttan:UsageRevenueMember 2023-02-01 2024-01-31 0001638826…
• FY2025 10-K: …2023-02-01 2024-01-31 0001638826 ttan:SubscriptionRevenueMember 2023-02-01 2024-01-31 0001638826 srt:MinimumMember us-gaap:CommonClassBMember 2024-12-12 2024-12-12 0001638826 ttan:IgniteScheduleEngineIncMember us-gaap:CustomerRelationshipsMember 2022-08-31 0001638826 us-gaap:CommonStockMember…
• TRMB (TRIMBLE INC.)
• FY2025 10-K: In millions, except par value) ASSETS Current assets: Cash and cash equivalents $ 253.4 $ 738.8 Accounts receivable, net 856.0 725.8 Inventories 186.3 194.3 Prepaid expenses 102.7 103.3 Other current assets 233.5 196.2 Assets held for sale - 312.0 Total current assets 1,631.9 2,270.4 Property and equipment, net 182.8…
• FY2025 10-K: …to two months. We do not enter into foreign currency contracts for trading purposes. Foreign currency contracts outstanding at the end of 2025 and 2024 are summarized as follows: At the End of 2025 At the End of 2024 Nominal Amount Fair Value Nominal Amount Fair Value (In millions) Forward contracts: Purchased $…
• WDAY (Workday, Inc.)
• FY2025 10-K: …our common stock and therefore be able to control all matters submitted to our stockholders for approval until the conversion of all shares of all Class A and Class B shares to a single class of common stock on the date that is the first to occur of (i) October 17, 2032, (ii) such time as the shares of Class B common…
• FY2025 10-K: …less than 9 % of the outstanding Class A common stock and Class B common stock, (iii) nine months following the death of both Mr. Duffield and Mr. Bhusri, and (iv) the date on which the holders of a majority of the shares of Class B common stock elect to convert all shares of Class A common stock and Class B common…
• ZS (Zscaler Inc)
• FY2025 10-K: PacificMember us-gaap:GeographicConcentrationRiskMember us-gaap:SalesRevenueNetMember 2022-08-01 2023-07-31 0001713683 zs:OtherMember us-gaap:GeographicConcentrationRiskMember us-gaap:SalesRevenueNetMember 2024-08-01 2025-07-31 0001713683 zs:OtherMember us-gaap:GeographicConcentrationRiskMember…
• FY2025 10-K: …Securities and Exchange Commission within 120 days of the fiscal year ended July 31, 2025. Recent Sales of Unregistered Equity Securities and Use of Proceeds (a) Sale of Unregistered Equity Securities None. (b) Use of Proceeds None. (c) Issuer Purchases of Equity Securities None. Stock Performance Graph This…
• AGYS (AGILYSYS, INC.)
• FY2025 10-K: …on a fixed price basis, revenue is recognized over time using an input method based on labor hours expended to date relative to the total labor hours expected to be required to satisfy the related performance obligation. We use the market approach to drive standalone selling price ("SSP") by maximizing observable…
• FY2025 10-K: …did not impact our consolidated financial statements. See Note 14, Segment Information . 3. Revenue Recognition For in depth discussion regarding our revenue recognition procedures for our revenue streams, see Note 2, Summary of Significant Accounting Policies . Disaggregation of Revenue We derive and report our…
• DOCN (DigitalOcean Holdings, Inc.)
• FY2025 10-K: U"). The financial performance level under the PRSUs was equal to the sum of the attainment of revenue targets weighted at 75 % and adjusted free cash flow margin targets weighted at 25 %. On February 18, 2025, the Company determined that the 2024 LTIP PRSU was achieved at 94.8 % of the target amount. This resulted in…
• FY2025 10-K: …things, which individuals perform certain functions for the registrant, as set forth in Rule 3b-7 and Rule 16a-1(f) under the Act. Based on these considerations, on February 18, 2026, the Board determined that the three individuals listed below are the sole executive officers of the Company and that, while there have…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Samsara Q1 FY2027 earnings release · analyst notes, June 2026