Why Owlet (OWLT) Is Advancing Today

Owlet (OWLT) is rising 6% after investment bank Lake Street started coverage of the shares with an $8.50 price target and a Buy rating.

Owlet develops and markets smart baby monitors.

Pixabay/Public domain

Why Lake Street Is Bullish on OWLT

OWLT sells the only smart baby monitors that have been approved by the FDA, Lake Street noted. More specifically, its monitors keep track of markers of health, including oxygen saturation and heart rate, the investment bank reported. As a result of the company’s technological competitive advantages over its competition, it is selling double the number of baby monitors of its closest competitor in its sector, Lake Street noted. Moreover, the company has a healthy gross margin of about 49%, although it is still not profitable, the investment bank stated.

Finally, after Masimo (MASI) exited the smart baby monitor market in November following its unsuccessful efforts to meaningfully penetrate the sector, other competitors may not enter the space, while Owlet does not face any strong competitors at this point, Lake Street asserted.

The Recent Price Action of OWLT Stock

In the last month, the shares have climbed 16%, while they are up 13.5% in the last three months.

While we acknowledge the potential of OWLT, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than OWLT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.