BNP Paribas Exane lowers Samsara stock price target amid sales concerns

BNP Paribas Exane lowered its price target on Samsara Inc. (IOT) to $38 from $43, maintaining a Neutral rating, after the company reported Q1 earnings that beat expectations with revenue of $367 million (31% YOY growth) and EPS of $0.11. Despite the earnings beat and positive analyst commentary from Goldman Sachs, Wolfe Research and RBC Capital, Samsara's stock declined 13% after hours due to a slowdown in sequential net new annual recurring revenue (NNARR) growth, which raised concerns about macroeconomic headwinds and tariff impacts on Samsara's end markets.

Analysis

Samsara Inc. reported a strong first fiscal quarter for 2026, with revenue reaching $367 million, a 31% year-over-year increase (32% ex-FX), and earnings per share of $0.11, significantly surpassing the forecasted $0.05. The company also maintains robust gross profit margins at 76.65%. Despite these positive results, Samsara's stock experienced a significant 13% decline in after-hours trading. This adverse reaction was primarily driven by a deceleration in sequential net new annual recurring revenue (NNARR) growth, which slowed to 8% from 10% in the prior quarter, leading to one of the smallest beats to annual recurring revenue (ARR) since its public listing. BNP Paribas Exane reduced its price target on Samsara to $38 from $43, maintaining a Neutral rating, citing challenges from extended sales cycles in April and ongoing macroeconomic and tariff-related headwinds affecting Samsara's end markets. However, other analysts offer a more optimistic outlook: Goldman Sachs maintained a Buy rating with a $46 price target, Wolfe Research raised its target to $45, and RBC Capital reiterated an Outperform rating with a $54 target, all highlighting strong demand, international growth, and competitive positioning as mitigating factors to the observed deal elongations.

Key Decisions for Investors

• Investors should closely monitor Samsara's net new annual recurring revenue (NNARR) growth in upcoming quarters as a critical barometer for its growth trajectory and ability to navigate current headwinds.
• Given the divergent analyst ratings and the market's negative reaction to the NNARR slowdown despite strong headline earnings, a careful assessment of risk tolerance is warranted, particularly regarding the stock's valuation sensitivity to growth deceleration.
• Consideration should be given to the ongoing impact of macroeconomic uncertainties and tariff issues on sales cycles and overall demand in Samsara's key markets.