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Owlet (OWLT)
NYSE:OWLT
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Owlet
(NYSE:OWLT)
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Rating:56Neutral
Price Target:
$12.50
▲(14.05% Upside)
Owlet's overall stock score is primarily driven by its strong earnings call performance, which highlights significant growth and strategic advancements. However, financial performance remains a major concern due to high leverage and negative cash flow. Technical analysis shows positive momentum, but valuation metrics are weak due to ongoing losses.
Positive Factors
FDA-Cleared DreamSock
Owlet’s DreamSock FDA OTC clearance is a durable competitive moat: it raises regulatory barriers to entry, boosts clinician and consumer trust, and facilitates broader retail and institutional adoption. This structural credential supports sustained premium positioning and market differentiation.
Recurring Subscription Growth
Rapid expansion of paying subscribers and a >25% attach rate indicates growing recurring revenue and higher lifetime value. A meaningful subscription base smooths revenue volatility, enhances cash visibility, and supports margin expansion as fixed app and platform costs scale.
International Expansion & India Clearance
171% international growth and regulatory clearance in India materially enlarge the addressable market and diversify revenue streams. Geographic expansion reduces single-market concentration, supports scale economies across ops and marketing, and underpins multi-year revenue runway.
Negative Factors
High Leverage
A debt-to-equity ratio of 1.42 signals significant leverage that constrains financial flexibility. Elevated borrowing magnifies refinancing, interest, and covenant risk during downturns and limits the company’s ability to self-fund expansion or weather weaker sales without dilutive or costly capital raises.
Weak Cash Generation
Negative operating cash flow and a steep -46% free cash flow decline highlight fragile cash conversion. Persistent cash deficits force reliance on external financing, increasing dilution or debt load, and undermine the company’s ability to sustainably invest in R&D, marketing, or international rollout.
Profitability Gap Despite Strong Gross Margin
A wide gap between a healthy gross margin (~52%) and deeply negative EBIT/net margins indicates structural operating inefficiencies or high SG&A. Until overhead and operating leverage are controlled, profitable unit economics may not translate to durable net profitability despite product-level strength.
Owlet (OWLT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$313.04M
Dividend YieldN/A
Average Volume (3M)236.65K
Price to Earnings (P/E)―
Beta (1Y)1.54
Revenue Growth26.83%
EPS Growth-52.47%
CountryUS
Employees80
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)0.03
Shares Outstanding27,580,606
10 Day Avg. Volume260,023
30 Day Avg. Volume236,652
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)-3.18
Price to Sales (P/S)0.86
P/FCF Ratio-5.62
Enterprise Value/Market Cap0.56
Enterprise Value/Revenue1.77
Enterprise Value/Gross Profit3.40
Enterprise Value/Ebitda-5.10
Forecast
1Y Price Target
$17.33Price Target Upside58.12% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 through the sale of its core products, including the Smart Sock and Owlet Cam, which are priced at a premium due to their innovative technology and brand positioning. In addition to direct product sales, the company has a subscription model that offers parents ongoing access to data analytics and enhanced features through its mobile app. This subscription service creates a recurring revenue stream. Furthermore, Owlet may also engage in partnerships with healthcare providers, hospitals, and insurance companies, which can lead to additional revenue opportunities through bulk sales or co-marketing initiatives aimed at promoting infant health monitoring.
Owlet Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 11, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong performance for Owlet, Inc. with record-breaking revenue, profitability, and significant global expansion achievements. The FDA clearance for DreamSock provides a competitive edge, and the Rhapsody partnership enhances the hospital integration strategy. Despite these highlights, there are concerns about tariff impacts and consumer environment uncertainties. However, the highlights significantly outweigh the lowlights.Q3-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Q3 2025 revenue was a record $32 million, increasing 45% versus Q3 2024. Gross profit reached a record $16.2 million with gross margins of 50.6%. Adjusted EBITDA was $1.6 million, marking the sixth consecutive quarter of profitability.
Significant Market Advantage
Owlet, Inc.'s DreamSock is the first FDA-cleared over-the-counter infant monitoring device. This FDA clearance provides a significant competitive advantage in the market.
Global Expansion Success
International revenue growth surged 171% year over year. The company received regulatory clearance to distribute DreamSock in India, expanding its global reach.
Strong Owlet 360 Subscription Growth
Total paying subscribers surpassed 85,000, with the subscription attach rate for DreamSock passing 25% by the end of Q3 2025.
Strategic Rhapsody Partnership
The Rhapsody partnership enhances the value proposition of BabySat, allowing real-time data access for neonatologists and hospitals, facilitating rapid integration with hospital systems.
Successful Capital Market Activities
Completed a warrant exchange and equity offering, raising net proceeds of approximately $32 million to strengthen the balance sheet and support long-term growth.
Negative Updates
Tariff Impact on Gross Margin
Tariff costs negatively impacted Q3 gross margin by 280 basis points, with new tariffs of 19% and 20% on imports from Thailand and Vietnam, respectively.
Consumer Environment Uncertainty
Despite strong performance, there is uncertainty around the consumer environment, government shutdown aftereffects, and potential impacts on the important Q4 holiday sales period.
Company Guidance
During the Owlet, Inc. Q3 2025 earnings call, the company provided robust guidance underscored by record-breaking financial performance across key metrics. Q3 revenue reached $32 million, marking a 45% increase compared to Q3 2024, driven by the launch of the new DreamSight camera and strong momentum in the core business. The gross profit was $16.2 million, with a gross margin of 50.6%, despite tariff impacts. The adjusted EBITDA was $1.6 million, marking the sixth consecutive quarter of profitability, and the company achieved its first-ever quarterly operating profit of $1.2 million. Owlet also reported a positive net income of $4.1 million, a significant turnaround from the $5.6 million net loss in the previous year. The company raised its full-year 2025 revenue expectations to between $103 million and $106 million, projecting a 32% to 36% year-over-year growth. Gross margin guidance for 2025 was narrowed to a range of 48% to 50%, factoring in 500 basis points impact from tariffs, and adjusted EBITDA is expected to be between $3.1 million and $3.8 million, marking the first full year of profitability.Owlet Financial Statement Overview
Summary
Owlet's financial performance is challenged by high leverage, negative profitability, and deteriorating cash flow. Despite revenue growth and a strong gross profit margin, the company faces significant financial risks due to its high debt-to-equity ratio and negative cash flow trends.Income Statement
Owlet's income statement shows a mixed performance. The company has achieved a revenue growth rate of 10.99% in the TTM period, indicating positive sales momentum. However, profitability remains a challenge with negative net profit margins at -41.14% and EBIT margins at -40.39%, reflecting ongoing operational inefficiencies. The gross profit margin of 52.09% is relatively strong, suggesting effective cost management at the production level.45
Neutral
Balance Sheet
The balance sheet presents a concerning picture with a high debt-to-equity ratio of 1.42, indicating significant leverage and potential financial risk. The return on equity is positive at 2.84%, but this is primarily due to the low equity base. The equity ratio is not favorable, suggesting a reliance on debt financing.30
Negative
Cash Flow
Cash flow analysis reveals challenges with negative operating cash flow and free cash flow. The free cash flow growth rate is negative at -46.35%, indicating deteriorating cash generation capabilities. However, the free cash flow to net income ratio is slightly above 1, suggesting that the company is managing to convert its earnings into cash, albeit at a minimal level.35
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 99.66M | 78.06M | 54.01M | 69.20M | 75.84M | 75.40M |
| Gross Profit | 51.88M | 39.31M | 22.59M | 23.31M | 35.06M | 35.88M |
| EBITDA | -34.64M | -9.47M | -27.49M | -75.53M | -42.71M | -8.25M |
| Net Income | -38.23M | -12.54M | -32.90M | -79.34M | -71.70M | -10.52M |
Balance Sheet | ||||||
| Total Assets | 74.86M | 49.52M | 44.12M | 58.10M | 140.05M | 40.12M |
| Cash, Cash Equivalents and Short-Term Investments | 23.76M | 20.25M | 16.56M | 11.23M | 95.05M | 17.01M |
| Total Debt | 24.95M | 11.87M | 16.39M | 18.30M | 16.53M | 28.84M |
| Total Liabilities | 113.46M | 70.66M | 73.80M | 68.74M | 84.86M | 60.94M |
| Stockholders Equity | -38.60M | -21.15M | -29.68M | -10.63M | 55.19M | -20.82M |
Cash Flow | ||||||
| Free Cash Flow | -7.51M | -11.97M | -23.59M | -82.94M | -42.58M | -1.19M |
| Operating Cash Flow | -7.02M | -11.21M | -23.53M | -81.38M | -40.56M | -129.00K |
| Investing Cash Flow | -493.00K | -761.00K | -59.00K | -1.56M | -2.02M | -1.06M |
| Financing Cash Flow | 9.69M | 16.04M | 28.91M | -878.00K | 120.62M | 6.46M |
Owlet Technical Analysis
Negative
10.96
Price Trends
13.96
Negative
11.55
Negative
9.13
Positive
Market Momentum
-0.67
Positive
33.52
Neutral
19.05
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 10.96 is below the 20-day moving average (MA) of 13.37, below the 50-day MA of 13.96, and above the 200-day MA of 9.13, indicating a neutral trend. The MACD of -0.67 indicates Positive momentum. The RSI at 33.52 is Neutral, neither overbought nor oversold. The STOCH value of 19.05 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
59 Neutral | $108.83M | -1.98 | -94.03% | ― | -20.10% | 7.87% | |
57 Neutral | $172.41M | -3.69 | -68.83% | ― | 16.63% | 10.43% | |
56 Neutral | $313.04M | -4.10 | ― | ― | 26.83% | -52.47% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
46 Neutral | $323.57M | -6.35 | -57.91% | ― | -4.39% | 11.70% | |
45 Neutral | $145.84M | -2.80 | -422.35% | ― | 21.02% | -200.88% | |
45 Neutral | $61.87M | -1.03 | -73.73% | ― | 15.59% | 4.13% |
* Healthcare Sector Average
OWLT
Owlet
10.96
6.25
132.70%
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RPID
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.