Investing.com -- Piper Sandler downgraded Samsara to Neutral from Overweight and reiterated a $40 price target, citing deteriorating app-download trends, tougher second-half comparisons and a shift toward cross-selling as a larger driver of growth.

The firm said the setup remains de-risked, particularly for free cash flow, and still expects about 4% upside to fiscal second-quarter revenue and a $120 million increase in net new annual recurring revenue.

The analyst firm flagged Samsara’s application downloads as the key concern. Downloads fell 14% year over year in the fiscal second quarter and declined 44% year over year in July, compared with growth of 17% in April and 28% in January. Piper Sandler said app downloads have the strongest correlation with revenue among its tracked indicators.

Other indicators remained stronger. Website traffic rose 108% year over year in the quarter and 31% sequentially, while transborder freight shipments increased 18% year over year and heavy truck sales rose 2%. Piper Sandler said those trends point to low-to-mid-20s percentage net new ARR growth and about 4% potential upside to revenue guidance.

The firm said shares have gained 50% over the past six months, leaving a more balanced risk-reward profile. It also expects growth to rely increasingly on customer expansion and cross-selling rather than core-market penetration, while tougher second-half comparisons could pressure momentum.

Piper Sandler maintained its view that Samsara has significant room to expand, but said valuation now limits the upside and other opportunities look more attractive.