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Sept 21 (Reuters) - Spruce Point Capital Management on Thursday flagged risks to revenue growth at Samsara over some of the accounting practices at the internet of things firm, and recommended a strong sell on its stock.
The company is overstating gross as well as earnings before interest, tax, depreciation and amortization margins by 664 basis points and 1,176 basis points, respectively, the short seller said based on a forensic audit and multiple Freedom of Information Act requests.
"We believe Samsara's valuation premium is likely to compress. We see up to 45%-75% downside risk to $6.30-$13.90 per share," Spruce Point said in its report.
Samsara, whose shares have more than doubled so far this year, did not immediately respond to a request for comment.
Its stock was down 2.7% at $24.55 in early trading. The company had raised more than $800 million in its initial public offering in December 2021. (Reporting by Yuvraj Malik in Bengaluru; Editing by Arun Koyyur)
