How are energy investors positioned?
Friday - Lake Street Capital Markets has initiated coverage on Owlet Inc. (NYSE:OWLT) with a Buy rating and set a price target of $8.50, well above the current trading price of $4.96. The firm highlighted Owlet’s leadership in the smart baby monitor market, noting the company’s unique position as the provider of the first and only FDA-cleared smart baby monitors available. InvestingPro data shows the company has achieved impressive revenue growth of ~75% over the last twelve months, suggesting strong market acceptance.
The research firm’s analysts pointed out that Owlet’s Dream Sock product stands out in the market with its over-the-counter clearance to monitor vital signs such as oxygen saturation and heart rate through pulse oximetry. This technological edge has contributed to Owlet’s strong presence on baby registries and has led to the company outselling its nearest competitor, Nanit, by a factor of two in the smart baby monitor segment. While the company maintains a healthy gross profit margin of ~49%, InvestingPro analysis indicates it is still working toward profitability, with current EBITDA at -$13.6M.
Lake Street also mentioned the unsuccessful attempt by Masimo (NASDAQ:MASI), a major player in hospital pulse oximetry, to enter the market with a competing product in 2023. Masimo’s withdrawal from the market in November has, according to the analysts, had little discernable impact on Owlet’s performance. The analysts believe that Masimo’s experience in this niche market could act as a deterrent to other potential competitors considering entering the space.
The firm’s positive outlook on Owlet is further reinforced by the lack of significant competition following Masimo’s exit. With Owlet’s established dominance and the barriers to entry that have become apparent, Lake Street’s analysts see a favorable market position for the company moving forward.
Owlet’s stock is expected to perform well, as indicated by the new price target, which suggests confidence in the company’s continued success and leadership in the smart baby monitor industry. According to InvestingPro analysis, the stock appears undervalued at current levels, with analysts setting an even more ambitious target of $15 per share. Investors can access detailed valuation metrics and 5 additional ProTips about Owlet through InvestingPro’s comprehensive research report.
In other recent news, Owlet, Inc. has introduced Owlet360, a subscription-based service designed to provide parents with detailed insights into their baby’s health and development. This new service utilizes Owlet’s extensive pediatric health data, offering tailored information on sleep patterns and key health metrics such as pulse rate and oxygen levels. Owlet360 includes features like video clip sharing and sleep environment insights, enhancing the company’s mission to support parents and ensure babies’ safety. The service has been tested with a select group of users and has reportedly become a daily tool for most subscribers. It is currently available to Owlet Dream App users in the U.S. with a seven-day free trial, priced at $5.99 per month. Owlet plans to expand the service internationally later this year, potentially introducing additional pricing options and features. Since its inception, Owlet has monitored over 1.7 million babies and tracked more than 17 trillion heartbeats, making its dataset one of the most comprehensive in pediatric health. The launch of Owlet360 is seen as a significant development for the company and the industry, with emphasis on providing actionable insights and peace of mind for parents.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.