Owlet (NYSE:OWLT) Posts Earnings Results, Beats Estimates By $0.29 EPS

Key Points

• Owlet beat quarterly estimates, reporting $0.20 EPS versus the expected $(0.09) and revenue of $33.9 million versus $31.71 million. Revenue rose 29.9% year over year, while adjusted EBITDA excluding the tariff refund reached a record $2.9 million.
• Owlet360 continued to gain traction, reaching 130,000 paying subscribers and $3.2 million in subscription revenue. International revenue surged 214% to $5.7 million, and U.S. sell-through excluding Prime Day increased 20%.
• Management reaffirmed full-year revenue guidance of $118 million-$122 million and raised adjusted EBITDA and gross-margin guidance because of one-time tariff refunds. However, Q3 revenue is expected to decline due to competitor discounting, difficult comparisons, and cautious consumer spending.

Owlet (NYSE:OWLT - Get Free Report) announced its quarterly earnings results on Tuesday. The company reported $0.20 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of ($0.09) by $0.29, FiscalAI reports. The company had revenue of $33.90 million during the quarter, compared to analysts' expectations of $31.71 million.

Here are the key takeaways from Owlet's conference call:

• Record Q2 results included revenue of $33.9 million, up 29.9% year over year, while adjusted EBITDA excluding the tariff refund reached a record $2.9 million.
• Owlet360 momentum continued, with 130,000 paying subscribers, $3.2 million in subscription revenue, and Dream Sock subscription penetration rising to 36% in the U.S.; web-based checkout and point-of-purchase enrollment could improve conversion and subscription margins over time.
• International revenue increased 214% year over year to $5.7 million, while U.S. sell-through excluding Prime Day rose 20%; management also expects Amazon’s FDA-clearance enforcement for vital-sign monitors to provide a longer-term competitive advantage.
• Management expects Q3 revenue to decline sequentially and year over year because of aggressive competitor discounting ahead of Amazon’s August 10 deadline and a difficult comparison with last year’s product launches; broader promotional events also indicate more cautious consumer spending.
• Full-year revenue guidance was reaffirmed at $118 million-$122 million, while adjusted EBITDA guidance increased to $10.75 million-$12.75 million and gross-margin guidance to 53%-55%, with the upgrades driven entirely by one-time tariff refunds rather than improved underlying expectations.

Owlet Price Performance

Shares of NYSE:OWLT traded up $0.04 during midday trading on Tuesday, hitting $5.46. 439,753 shares of the stock were exchanged, compared to its average volume of 260,424. The stock has a market cap of $158.64 million, a P/E ratio of -1.78 and a beta of 1.85. The company has a current ratio of 1.71, a quick ratio of 1.33 and a debt-to-equity ratio of 0.09. Owlet has a twelve month low of $4.19 and a twelve month high of $16.94. The company has a 50 day moving average price of $5.36 and a 200-day moving average price of $6.86.

Analysts Set New Price Targets

A number of analysts recently commented on OWLT shares. Weiss Ratings reissued a "sell (e+)" rating on shares of Owlet in a report on Friday, July 31st. TD Cowen reiterated a "buy" rating and set a $10.00 price target (down from $13.00) on shares of Owlet in a research report on Monday, June 22nd. Finally, Wall Street Zen raised Owlet from a "strong sell" rating to a "sell" rating in a research note on Sunday, May 10th. Three research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the company presently has an average rating of "Hold" and an average target price of $15.00.

Hedge Funds Weigh In On Owlet

Several hedge funds have recently added to or reduced their stakes in the business. Informed Momentum Co LLC raised its position in Owlet by 1.6% during the fourth quarter. Informed Momentum Co LLC now owns 112,893 shares of the company's stock worth $1,828,000 after acquiring an additional 1,737 shares during the last quarter. Bank of America Corp DE grew its position in shares of Owlet by 6,517.7% in the third quarter. Bank of America Corp DE now owns 5,228 shares of the company's stock valued at $44,000 after purchasing an additional 5,149 shares during the last quarter. XTX Topco Ltd purchased a new position in shares of Owlet during the 2nd quarter worth approximately $90,000. Goldman Sachs Group Inc. purchased a new position in shares of Owlet during the 1st quarter worth approximately $43,000. Finally, Charles Schwab Investment Management Inc. acquired a new position in shares of Owlet during the 4th quarter worth approximately $242,000. 72.60% of the stock is currently owned by hedge funds and other institutional investors.

About Owlet

Owlet Baby Care, Inc is a consumer health technology company specializing in the design and manufacture of smart baby monitoring products. The company’s flagship device, the Owlet Smart Sock, is a wearable monitor that tracks a newborn’s heart rate and oxygen saturation levels and transmits real-time data to a mobile app. Owlet has since expanded its product suite to include the Owlet Cam, an HD video monitor with audio and motion alerts, and the Dream Sock, a non-wearable device that collects sleep metrics to help parents understand and improve their baby’s rest patterns.

Founded in 2013 by engineer and father Kurt Workman, Owlet is headquartered in Lehi, Utah.

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