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Last week, both Owlet (OWLT) and GEN Restaurant (GENK) released their Q3’24 earnings and needless to say, they weren’t the best. If you need a refresher on the ideas, you can view them here for each respective name; OWLT / GENK.
Let’s first start with Owlet and what I believe led to the recent selloff after reporting.
Owlet (OWLT)
Quick positive notes. This quarter's adjusted EBITDA was a record for the company as well as the second consecutive positive quarter. Additionally, Q3 marked the highest gross margin since going public, at 52.2%.
Returns continue to trend downward to just above 4% vs historical averages of 7-9% and Owlet’s market share of baby monitors has increased to ~31% from 23% this time last year.
They also managed to add five Durable Medical Equipment (DME) manufacturers to support growth in additional channels and have officially expanded to 26 countries in total (international sales + 96% y/y).
While this is all nice, I think much of the disappointment stemmed from a few things.
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