Overvaluation Concerns Materialize in Stock Performance

Overvaluation On January 8, shares of IoT platform provider Samsara Inc. (IOT) closed at $33.80 on the New York Stock Exchange, down 6.91% from the previous day. The company’s market capitalization shrank by about $780 million (approximately KRW 1.09 trillion) in a single session. Although Samsara’s high-growth narrative remains intact, renewed doubts over its valuation and profitability triggered a wave of selling.

The Growth Stock Paradox: Beating EPS but Losing Valuation

Since last year, Samsara has delivered quarterly revenue growth of around 30%, rapidly expanding its customer base across transportation, construction and public sectors. According to recent analysis, third-quarter revenue reached roughly $416 million, marking a year-over-year surge, and analysts still expect an annual growth rate above 17%. Nevertheless, investors are now fixated not on growth rates but on price. At its peak in 2025, Samsara’s price-to-sales ratio (PSR) traded in the mid-to-upper teens, while its price-to-earnings ratio (P/E) climbed into triple digits. In such a high-valuation structure, even a hint of slower growth can trigger a large correction.

Samsara Ventures: Building the Future of Connected Ops ## SEC Filings and Insider Sales Deepen Investor Fatigue

Investor sentiment cooled more on insider transactions than on the results themselves. SEC disclosures revealing repeated share sales by executives and founders since 2025 fueled speculation that the company may have reached the apex of its growth cycle. In particular, it emerged that in the days leading up to the earnings announcement last June, the CEO and co-founder disposed of shares worth millions of dollars, reinforcing the view that management was conscious of an elevated valuation ceiling.

Options Market Still Bets on Growth Narrative

Derivatives traders, however, continue to price in both volatility and medium- to long-term upside for Samsara. When January 2026 options debuted on Nasdaq last November, investors structured strategies around:

  • Strike prices: $35 puts and $43 calls
  • Simultaneous positions to capture moves in either direction
  • Covered-call approach using the $43 call, which offered potential annualized returns in the 30% range

Ultimately, the 6.9% slide on the 8th illustrates the classic “growth stock paradox” catching up with Samsara. While its structural growth story—digitizing connected logistics and field operations—remains compelling, revenue growth alone no longer suffices. In the coming quarters, the pace at which Samsara achieves a sustained profit trajectory, and the point at which insider trading shifts from sell to buy, will be pivotal in determining the stock’s direction.