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Owlet (OWLT)
NYSE:OWLT
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Owlet
(NYSE:OWLT)
46Neutral
Positive Factors
Market Expansion
OWLT saw 3Q24 International revenue growth of 96% year-over-year, driven by sales in the UK and Europe, and as OWLT expanded to nine additional European markets.
Product Offering
The outlook for Owlet Inc is positive as the company evolves beyond just being a device manufacturer, with subscription services like Owlet360 expected to increase customer lifetime value and monetize its unique data set.
Revenue Growth
There is potential for higher than expected revenue driven by products like BabySat and the Owlet360 subscription offering.
Negative Factors
Investor Attention
Owlet has been overlooked by investors, but it deserves attention and has been initiated with a Buy rating.
Seasonal Sales Impact
4Q tends to be sequentially lower compared to 3Q, as retailer load-in for the 4Q holiday season tends to be largely completed in 3Q.
Owlet (OWLT) vs. S&P 500 (SPY)
Market Cap
$59.31M
Dividend YieldN/A
Average Volume (3M)40.95K
Price to Earnings (P/E)―
Beta (1Y)0.06
Revenue Growth44.56%
EPS Growth69.12%
CountryUS
Employees80
SectorHealthcare
Sector Strength71
IndustryMedical - Devices
Share Statistics
EPS (TTM)-2.06
Shares Outstanding16,566,430
10 Day Avg. Volume34,204
30 Day Avg. Volume40,954
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.90
Price to Cash Flow (P/CF)-2.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.75Price Target Upside228.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Owlet Business Overview & Revenue Model
Company DescriptionOwlet, Inc. operates as a digital parenting platform in the United States. The company's platform focuses on giving real-time data and insights to parents. Its products include Smart Sock, a baby monitor to track an infant's oxygen levels, heart rates, and sleep trends; Dream Sock, an app to assist children for better sleep; Cam, a video streaming app to hear and see baby from anywhere; and Dream Lab, an interactive online platform that assists families in building healthy sleep habits. The company also offers Dream Duo, a monitoring system for baby's sleeping habits and includes wearable sock monitor, HD video, and digital sleep coach. Owlet, Inc. was founded in 2012 and is based in Lehi, Utah.
How the Company Makes MoneyOwlet generates revenue primarily through the sale of its smart baby monitoring devices and related accessories. The company sells its products directly to consumers via its e-commerce platform and through various retail partners, both online and in physical stores. Additionally, Owlet may offer subscription services for enhanced features or additional functionalities of its products, which can provide a recurring revenue stream. Key partnerships with retailers and potential collaborations with healthcare providers can significantly contribute to its earnings by expanding its market reach and enhancing product distribution. Owlet's focus on continuous innovation and product development also plays a crucial role in maintaining and growing its customer base, thereby driving revenue growth.
Owlet Financial Statement Overview
Summary
Owlet shows revenue growth and some improvement in financial metrics, but faces profitability and cash flow challenges. High leverage and past negative equity pose risks, and while improvements exist, financial stability needs further strengthening.Income Statement
Owlet's income statement shows some improvement in revenue over the past year with a growth rate of approximately 44.6%, but profitability remains a concern. The gross profit margin for the latest year is 50.3%, indicating efficient cost management relative to revenue generation. However, the company continues to report negative EBIT and EBITDA margins at -26% and -26% respectively, reflecting ongoing operational challenges. The net profit margin has improved compared to previous years but remains negative at -22.0%, indicating significant losses.40
Negative
Balance Sheet
Owlet's balance sheet reveals high leverage with a debt-to-equity ratio that cannot be computed due to negative equity in prior years, though it has turned positive this past year. The equity ratio stands at 26.1%, which is a positive shift from previous years, but overall financial stability remains weak with low equity. The return on equity (ROE) is negative at -133%, highlighting ongoing challenges in generating returns for shareholders.35
Negative
Cash Flow
The cash flow statement indicates that Owlet is still facing difficulties in improving its cash flow position, with negative operating cash flow of -$11.7 million and free cash flow of the same amount. This marks an improvement from previous years, but the free cash flow to net income ratio is 0.68, showing some ability to convert profits into cash. Despite improvements in free cash flow growth, the company is not yet generating sustainable positive cash flows.30
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 78.06M | 54.01M | 69.20M | 75.80M | 75.40M | Gross Profit |
| 39.31M | 22.59M | 23.30M | 35.00M | 35.88M | EBIT |
| -20.22M | -28.63M | -84.60M | -55.70M | -6.99M | EBITDA |
| -9.47M | -27.49M | -75.53M | -42.71M | -8.25M | Net Income Common Stockholders |
| -12.54M | -32.90M | -79.29M | -98.17M | -10.52M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 20.25M | 16.56M | 11.20M | 95.10M | 17.01M | Total Assets |
| 49.52M | 44.12M | 58.10M | 140.00M | 40.12M | Total Debt |
| 7.37M | 15.22M | 16.30M | 16.50M | 28.84M | Net Debt |
| -12.88M | -1.34M | 5.10M | -78.60M | 11.83M | Total Liabilities |
| 66.33M | 73.80M | 68.70M | 84.80M | 60.94M | Stockholders Equity |
| 12.94M | -29.68M | -10.60M | 55.20M | -20.82M |
| Cash Flow | Free Cash Flow | |||
| -11.97M | -23.59M | -82.97M | -42.62M | -1.19M | Operating Cash Flow |
| -11.21M | -23.53M | -81.40M | -40.60M | -129.00K | Investing Cash Flow |
| -761.00K | -59.00K | -1.60M | -2.00M | -1.06M | Financing Cash Flow |
| 16.04M | 28.91M | -900.00K | 120.60M | 6.46M |
Owlet Technical Analysis
Negative
3.58
Price Trends
4.55
Negative
4.66
Negative
4.55
Negative
Market Momentum
-0.22
Positive
28.05
Positive
18.24
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OWLT, the sentiment is Negative. The current price of 3.58 is below the 20-day moving average (MA) of 4.34, below the 50-day MA of 4.55, and below the 200-day MA of 4.55, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 28.05 is Positive, neither overbought nor oversold. The STOCH value of 18.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OWLT.
Owlet Risk Analysis
Owlet disclosed 76 risk factors in its most recent earnings report. Owlet reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Owlet Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $19.46B | ― | -19.42% | ― | 56.75% | 59.77% | |
60 Neutral | $11.66B | 28.31 | 11.26% | ― | 3.54% | -3.41% | |
54 Neutral | $10.36B | ― | -3.24% | 5.53% | -4.58% | -1269.23% | |
52 Neutral | $256.56M | 25.27 | -4.64% | ― | -54.17% | -135.78% | |
49 Neutral | $6.85B | 0.81 | -52.91% | 2.50% | 19.94% | 1.20% | |
46 Neutral | $59.31M | ― | 60.56% | ― | 44.56% | 69.12% | |
39 Underperform | $305.96M | ― | -27.17% | ― | 10.79% | 51.30% |
* Healthcare Sector Average
Performance Comparison
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Owlet Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -20.44% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong positive sentiment, with Owlet, Inc. achieving record financial performance and significant international expansion. The launch of Owlet 360 and the company's progress in strategic focus areas underscored its growth potential. However, legal settlement costs and challenges in scaling the healthcare channel were notable concerns.Highlights
Record Revenue Growth
Owlet, Inc. achieved a record revenue of $78.1 million for 2024, representing a 45% growth compared to 2023. Fourth quarter revenue was $20.5 million, with a year-over-year growth of 37% when adjusted for prior year revenue shifts.
Expansion into Global Markets
International revenue grew by 98% for 2024 compared to 2023, with Owlet products now available in 26 countries. Key growth regions included the UK and Germany, with Black Friday sales in Germany increasing by 147% year-over-year.
Positive Financial Metrics
Owlet achieved a gross margin of over 50% for 2024, marking the best annual gross margin in company history. The company also achieved three consecutive quarters of positive adjusted EBITDA in 2024, improving by over $14 million from 2023.
Launch of Owlet 360
Owlet launched its new subscription service, Owlet 360, aiming to improve pediatric health by allowing parents to monitor health metrics at home. Early subscription metrics exceeded expectations with a 12% attach rate within the first month.
Lowlights
Legal Settlement Costs
Owlet incurred $6.2 million in legal charges related to the settlement of cases from its 2021 SPAC offering. These costs impacted operating expenses and resulted in a net loss of $9.1 million for the fourth quarter.
Challenges in Scaling Healthcare Channel
The expansion of the Baby Sat into medical channels is progressing, but it will take time to scale, with full operations anticipated by mid-2025. Efforts to achieve insurance reimbursement and expand Medicaid coverage are ongoing.
Company Guidance
During the Owlet, Inc. fourth quarter 2024 earnings call, the company reported exceptional financial performance and provided robust guidance for 2025. Owlet exceeded the high end of their guidance ranges, with 2024 revenue reaching $78.1 million, representing a 45% growth compared to 2023. The fourth quarter alone saw revenue of $20.5 million, with gross margins of 53.5%, an increase of 650 basis points from the previous year. The company achieved positive adjusted EBITDA for the final three quarters of 2024, reflecting a $14 million improvement over 2023. For 2025, Owlet projects revenue between $88 million and $92 million, gross margins of 50% to 52%, and aims for adjusted EBITDA profitability. The launch of the Owlet 360 subscription service, which achieved a 12% attach rate in January, is expected to drive recurring revenue and expand the company's pediatric health platform, though no significant revenue from this or the Baby Sat device is anticipated in 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.