Samsara Inc. (IOT): A Bull Case Theory

We came across a bullish thesis on Samsara Inc. (IOT) on Next Gen Investors Endowment’s Substack by Judah Kang. In this article, we will summarize the bulls’ thesis on IOT. Samsara Inc. (IOT)'s share was trading at $40.69 as of 12^th June. IOT’s forward P/E was 100 according to Yahoo Finance.

Samsara Inc. (NYSE: IOT) is a leading player in the fast-growing $96.9 billion connected operations market, offering a unified, cloud-based platform that delivers mission-critical insights to industries reliant on physical operations. The company derives 98% of its revenue from multi-year subscriptions tied to applications such as AI-driven video safety, vehicle telematics, and equipment monitoring, providing high visibility and predictability.

Samsara’s platform replaces fragmented, single-use systems with an integrated solution that enhances efficiency and safety, creating strong customer stickiness through high switching costs and long-term contracts. Its robust data advantage—processing over 14 trillion data points annually—fuels its machine learning capabilities, compounding its competitive edge.

Since its IPO, Samsara has demonstrated consistent double-digit growth while improving profitability, with gross margins rising from 59.7% in FY2020 to 76.2% in FY2025, and net margins narrowing to -12.4%. GAAP profitability is expected in Q1 FY2026, potentially unlocking valuation multiple expansion as it becomes eligible for earnings-based metrics. Despite operating in a fragmented and competitive market, Samsara’s first-mover advantage and scalable infrastructure differentiate it as the only provider of a comprehensive, integrated IoT solution across fleets, equipment, and sites.

The company is well-positioned to capitalize on accelerating digital transformation across physical industries, supported by tailwinds in IoT adoption and increasing demand for operational data analytics. A valuation based on IoT and AI peer multiples suggests 21–41% upside over 1–5 years, with potential for re-rating post-profitability.

While risks remain from macroeconomic headwinds and market competition, Samsara offers a compelling investment case driven by durable growth, operational leverage, and a leading position in a structurally expanding market.

Previously, we highlighted a bullish thesis on Samsara (IOT) by Compounding Your Wealth in March 2025, stressing its AI-led product momentum, strong ARR growth, and expanding enterprise and international footprint. The stock price has appreciated by approximately 6% since our coverage. Judah Kang echoes this enthusiasm but focuses on Samsara’s data advantage, subscription predictability, and nearing GAAP profitability, arguing for a re-rating as it scales as the leading integrated IoT platform.

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Disclosure: None. This article was originally published at Insider Monkey.