Smart-ring IPO reveals mixed vital signs

Peloton Interactive

09/09/2026 13:00

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Karen Kwok
NEW YORK, Sept 8 (Reuters Breakingviews) - Investors buying into Oura's listing might want to keep track of the company’s own erratic vital signs. The Finnish-American company sells sleep- and health-tracking smart rings for over $300 a pop, plus a $70 annual membership. With revenue growing 74% year-over-year, Chief Executive Tom Hale is seeking a $16 billion IPO valuation, according to Bloomberg. The problem is that the company still hasn’t shown that it’s more than another health-tech fad.
Aside from adorning the hands of tech billionaires like Mark Zuckerberg and Jack Dorsey, Oura also prioritizes women's health through tracking features that sometimes flag a pregnancy before users know they’re expecting. Women make up 72% of subscribers to the company’s premium services.
Selling the ring itself is a profitable endeavor. For the nine months to June, Oura generated average revenue of $311 per ring, resulting in a gross margin of 46%. Exercise-bike maker Peloton PTON.O, which similarly offers health-focused devices and an associated subscription, recorded a gross margin of only 13% on its hardware in the most recent quarter.
The challenge is turning ring buyers into long-term subscribers. More than 94% of activations convert to paid membership, yet only 85% of members stick around for longer than a year. Subscriptions account for only 20% of revenue, little changed from two years ago, whereas at Peloton the figure is 68%. Shifting this mix over time is crucial: subscriber fees are far more profitable than hardware.
Being so reliant on physical goods also invites other hiccups. Battery problems in some rings drove an $84 million increase in warranty expenses in 2025. Fast product cycles create obsolete-inventory risk. Oura also competes against some of the biggest companies in the world: Apple AAPL.O, which has its ubiquitous smartwatch, and Alphabet GOOGL.O, with its Fitbit bands.
Peloton is something of a cautionary tale. The pandemic darling’s shares have crashed 97% from a giddy high in 2021. Just over the past year, the stock has slipped by 36%.
Still, there’s one product-focused rival with a stronger pulse. Swiss peer Garmin GRMN.BN, which makes a host of sports-focused devices, trades at a bit over 6 times expected revenue for the 12 months to September, according to Visible Alpha data. If Oura keeps growing at its current pace every quarter, then its target valuation works out to a multiple of slightly under 6 times. Granted, the company might prefer to be viewed as a hyper-profitable health-data platform, rather than a gadget maker. For now, though, that rings hollow.
     
Follow Karen Kwok on LinkedIn and X.
     
CONTEXT NEWS
Oura disclosed its IPO prospectus in an SEC filing on September 3. The company, which makes a health-tracking ring device, generated $1.2 billion in revenue for the nine months ended June 30, 2026. 
Goldman Sachs, Morgan Stanley, JPMorgan, Allen & Company and Jefferies are serving as lead bookrunners.

(Editing by Jonathan Guilford; Production by Maya Nandhini)
((For previous columns by the author, Reuters customers can click on KWOK/karen.kwok@thomsonreuters.com))