Owlet Gains From FDA Clarity: Does Regulation Create an Edge?

Owlet, Inc. OWLT is benefiting from increased regulatory clarity in the infant monitoring market, a factor that may strengthen its competitive positioning over time. As safety and accuracy gain importance for parents and caregivers, regulation is becoming a key differentiator rather than a constraint.

One of the most important developments supporting Owlet’s longer-term outlook is regulatory differentiation. The company remains the first and only FDA-cleared over-the-counter infant monitoring device provider which is currently available. This distinction gained added relevance after the FDA issued a safety communication cautioning consumers against unauthorized infant monitors that have not been reviewed for safety or effectiveness. The company described this development as a clear separation between regulated and unregulated products, reinforcing its credibility and raising barriers to entry.

For parents, FDA clearance helps validate product reliability and safety. For retailers and healthcare partners, it reduces compliance risk when recommending or distributing monitoring devices. From an investor perspective, this regulatory edge suggests that Owlet’s market position may be more defensible than that of competitors operating without clearance, particularly as awareness around infant safety standards increases.

In the third quarter of 2025, the company also highlighted progress beyond hardware, supported by its Owlet360 subscription platform. Paying subscribers surpassed 85,000, while attach rates exceeded 25% by the end of the third quarter. This recurring revenue layer complements the regulated hardware offering and may further strengthen customer stickiness.

Overall, clearer FDA guidance appears to favor compliant players, potentially giving Owlet a durable advantage in a more tightly regulated market.

Owlet’s Competitive Landscape

Competition in connected infant monitoring and digital health remains intense, with companies such as Masimo MASI and iRhythm Technologies IRTC shaping adjacent segments of the regulated monitoring market. Masimo is a leader in medical-grade pulse oximetry and patient monitoring, with strong hospital relationships and a long history of operating under strict regulatory standards. The company’s scale and clinical focus highlight the complexity involved in developing and commercializing compliant monitoring solutions, reinforcing the high regulatory bar Owlet must continue to meet as it expands healthcare partnerships.

iRhythm Technologies operates in remote cardiac monitoring and provides a useful comparison from a business model perspective. The company relies on regulated devices, reimbursement pathways and recurring revenues tied to long-term monitoring services. While iRhythm Technologies targets a different patient group, its experience shows how regulatory clearance can support durable revenue streams.

Against these peers, Owlet remains more narrowly focused on infant health, but its FDA-cleared consumer approach may support deeper engagement if execution stays on track.

OWLT’s Price Performance & Estimates

Shares of Owlet have gained 69.1% in the past six months, outperforming the Zacks Electronics - Miscellaneous Products industry’s 26.3% growth and the Zacks Computer and Technology sector’s 19.2% rise.

The Zacks Consensus Estimate for OWLT’s 2026 loss has narrowed to 25 cents from 48 cents in the past 30 days. The company is expected to report 12 cents loss per share in 2025.

OWLT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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