Owlet, Inc. (NYSE:OWLT) Just Reported Earnings, And Analysts Cut Their Target Price

The analyst might have been a bit too bullish on Owlet, Inc. (NYSE:OWLT), given that the company fell short of expectations when it released its first-quarter results last week. It was a pretty negative result overall, with revenues of US$15m missing analyst predictions by 9.9%. Worse, the business reported a statutory loss of US$0.51 per share, much larger than the analyst had forecast prior to the result. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. 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.

View our latest analysis for Owlet

Taking into account the latest results, the most recent consensus for Owlet from sole analyst is for revenues of US$74.4m in 2024. If met, it would imply a huge 28% increase on its revenue over the past 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 favorable reduction to 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. So it looks like Owlet is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analyst reconfirmed their loss per share estimates for 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. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Owlet's future valuation.

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 2026, which can be seen for free on our platform here.

You still need to take note of risks, for example - Owlet has 4 warning signs (and 1 which is a bit unpleasant) 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.