Owlet, Inc. (NYSE:OWLT) Faces Capital Efficiency Challenges

Owlet, Inc. (NYSE:OWLT) is a company that focuses on developing smart baby monitoring products. These products are designed to provide parents with real-time data on their baby's health and well-being. Despite its innovative offerings, Owlet faces challenges in capital efficiency, as indicated by its financial metrics.

Owlet's Return on Invested Capital (ROIC) is -119.33%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 12.20%. This negative ROIC suggests that Owlet is not generating sufficient returns to cover its cost of capital, indicating inefficient use of its resources. The ROIC to WACC ratio of -9.78 further highlights this inefficiency.

In comparison, Hippo Holdings Inc. (HIPO) has a ROIC of 0% and a WACC of 11.08%. While not generating a return, Hippo's situation is less concerning than Owlet's negative return. The ROIC to WACC ratio of 0 suggests that Hippo is at least breaking even in terms of capital efficiency.

ATI Physical Therapy, Inc. (ATIP) stands out with a positive ROIC of 0.36% and a high WACC of 20.33%. Despite the high cost of capital, ATI's ROIC to WACC ratio of 0.018 indicates it is the most efficient among its peers in utilizing its capital relative to its cost. This efficiency suggests potential for growth.

Sharecare, Inc. (SHCR) and Science 37 Holdings, Inc. (SNCE) both have negative ROICs, at -27.09% and -83.21% respectively. While Sharecare's ROIC is less negative than Owlet's, it still indicates inefficiency. Science 37's ROIC is worse than Sharecare's but better than Owlet's, reflecting poor capital efficiency.