Owlet, Inc.'s (NYSE:OWLT) Profit Outlook

Owlet, Inc. (NYSE:OWLT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Owlet, Inc. provides digital parenting solutions in the United States and internationally. The US$35m market-cap company announced a latest loss of US$37m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Owlet will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Owlet

According to some industry analysts covering Owlet, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$58k in 2026. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 74% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Owlet's upcoming projects, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Owlet currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of Owlet to cover in one brief article, but the key fundamentals for the company can all be found in one place – Owlet's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Valuation: What is Owlet worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Owlet is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Owlet’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.