Samsara (IOT) shows strong growth in the face of turmoil. That’s what we concluded a few weeks ago during our annual check in with a stock we not only hold, but think others should consider holding. The company has sported some of the most solid software-as-a–service (SaaS) metrics we’ve seen, though the recent disappearance of net retention rate seems puzzling. Attention is now directed towards the Rule of 40 which the company has managed to meet or exceed over the past four quarters. Overall, we saw no major causes for concern during our recent checkup which is why we were surprised to see Spruce Point Capital issue a short report on IOT last week.
Investors can only hope the stocks they find most compelling are scrutinized by some of the most critical critics around – short sellers. These firms make their living identifying possible discrepancies between the intrinsic value of a company and the value the market is willing to assign. We generally see short reports target companies that are overvalued and have some perceived systemic problems that aren’t overly apparent. Since we already know Samsara is overvalued, we’re only interested in exploring the latter.
