Owlet, Inc. (NYSE:OWLT) Just Reported And Analysts Have Been Cutting Their Estimates

It's been a good week for Owlet, Inc. (NYSE:OWLT) shareholders, because the company has just released its latest third-quarter results, and the shares gained 9.2% to US$1.01. Revenues were in line with expectations, at US$17m, while statutory losses ballooned to US$0.17 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Owlet

Taking into account the latest results, the consensus forecast from Owlet's twin analysts is for revenues of US$80.1m in 2023, which would reflect a sizeable 46% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 53% to US$0.35. Before this latest report, the consensus had been expecting revenues of US$114.0m and US$0.30 per share in losses. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The average price target fell 32% to US$1.77, implicitly signalling that lower earnings per share are a leading indicator for Owlet's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Owlet's rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 2.8% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Owlet to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Owlet. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Owlet you should be aware of, and 1 of them is concerning.

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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.