Here's What Owlet's Disappointing Outlook Says For 2026

Owlet (OWLT) stock plummeted Friday after the wearable baby-monitoring tech outlet issued a disappointing outlook for the first quarter.

The company known for its Owlet Sock and AI-tied subscription service, Owlet360, expects $20.5 million in first-quarter sales, missing expectations for $26.2 million. On a year-over-year basis, sales would slide 3% at the midpoint, William Blair analyst Andrew Brackmann said in a report.

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Last year, the seasonally weak first quarter represented about 20% of full-year sales. This year, it’s expected to account for just 16% of total forecasts. That puts a lot of pressure on the back half of the year to outperform.

“Management noted weaker consumer spending in the holiday season, as well as macro uncertainty, which has in part led to retailers carrying less inventory on hand — thus impacting Owlet,” Brackmann said. “Dynamics should naturally improve throughout the year … and leading indicators and sell-through trends remain strong.”

Still, in morning trades, Owlet stock plunged more than 33% to 7.71. Shares tore through their 50-day and 200-day moving averages, and hit their lowest point since November.

Owlet Stock: Fourth-Quarter Beat

The guidance overshadowed a strong fourth-quarter report. Owlet reported $26.6 million in sales, above expectations for $26 million, according to FactSet. Though Owlet also posted losses, they were narrower than expected.

Brackmann noted positive progress at Owlet. The company has grown its paying Owlet360 subscribers to 110,000, as of the beginning of March. It’s also expected to soon launch artificial intelligence insights, leading to more personalized outputs like sleep coaching.

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More and more parents are adding the Dream Sock to their registries. Registry additions were up 23% year over year in the fourth quarter. And the company recently announced plans to launch Owlet OnCall, a telehealth platform, in the second half of this year.

“All of these should help drive the company toward becoming a more fulsome pediatric health platform over the coming years,” Brackmann said.

He kept his outperform rating on Owlet stock.

Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.

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