It's shaping up to be a tough period for Owlet, Inc. (NYSE:OWLT), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Revenues missed expectations somewhat, coming in at US$15m, but statutory earnings fell catastrophically short, with a loss of US$0.51 some 27% larger than what the analyst had predicted. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Owlet after the latest results.
After the latest results, the single analyst covering Owlet are now predicting revenues of US$74.4m in 2024. If met, this would reflect a substantial 28% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 77% to US$0.57. Before this latest report, the consensus had been expecting revenues of US$74.7m and US$1.04 per share in losses. Although the revenue estimate has not really changed Owlet'sfuture looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.
Even with the lower forecast losses, the analyst lowered their valuations, with the average price target falling 44% to US$15.00. It looks likethe analyst has become less optimistic about the overall business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Owlet is forecast to grow faster in the future than it has in the past, with revenues expected to display 39% annualised growth until the end of 2024. If achieved, this would be a much better result than the 21% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.1% annually. Not only are Owlet's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analyst made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Owlet going out as far as 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Owlet has 4 warning signs (and 1 which can't be ignored) we think you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.