Zepp Health (ZEPP) AI Stock Analysis

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Zepp Health

(NYSE:ZEPP)

Rating:48Neutral

Price Target:

$2.50

▲(5.93%Upside)

Zepp Health's overall stock score is primarily impacted by its challenging financial performance, evidenced by declining revenues and negative cash flow. Despite positive guidance and product successes highlighted in the earnings call, the technical indicators and valuation metrics reflect ongoing weaknesses.

Zepp Health (ZEPP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$34.22M

Dividend YieldN/A

Average Volume (3M)26.23K

Price to Earnings (P/E)―

Beta (1Y)0.83

Revenue Growth-39.27%

EPS Growth-211.36%

CountryUS

Employees765

SectorTechnology

Sector Strength79

IndustryConsumer Electronics

Share Statistics

EPS (TTM)-0.08

Shares Outstanding7,042,547

10 Day Avg. Volume25,729

30 Day Avg. Volume26,234

Financial Highlights & Ratios

PEG Ratio0.19

Price to Book (P/B)1.12

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$12.32

Price Target Upside422.03% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Zepp Health Business Overview & Revenue Model

Company DescriptionZepp Health Corporation, together with its subsidiaries, develops, manufactures, and sells smart wearable technological devices in the People's Republic of China. It operates through two segments, Xiaomi Wearable Products, and Self-Branded Products and Others. The company offers smart bands, watches, and scales; and smart hearable products, home treadmill, sportswear, home appliances, and smart watch accessories under the Xiaomi and Amazfit brands. It provides charts and graphs to display analysis of the activity and biometric data collected from users through its Zepp Life and Zepp mobile apps. The company was formerly known as Huami Corporation and changed its name to Zepp Health Corporation in February 2021. Zepp Health Corporation was founded in 2013 and is headquartered in Hefei, the People's Republic of China.

How the Company Makes MoneyZepp Health generates revenue primarily through the sale of its smart wearable devices, such as smartwatches and fitness bands, which are marketed under various brand names including Amazfit and Zepp. The company also earns money by providing value-added services, including health data analytics and cloud-based health management solutions, which are often offered through subscription models. Additionally, Zepp Health benefits from partnerships with healthcare providers and technology companies to integrate its health monitoring solutions into broader health ecosystems, further contributing to its revenue streams.

Zepp Health Earnings Call Summary

Earnings Call Date:May 19, 2025

(Q1-2025)

% Change Since: -15.11%|

Next Earnings Date:Aug 20, 2025

Earnings Call Sentiment Positive

The earnings call reveals a positive sentiment due to the significant growth in Amazfit revenue, successful product launches, and improved market share. However, challenges remain with operating profit pressure and increased operating expenses. The company plans to mitigate tariff impacts and anticipates substantial growth in the upcoming quarters.

Q1-2025 Updates

Positive Updates

Amazfit Revenue Growth

Amazfit revenue saw a 10% year-over-year growth for the first time after two years of transformation.

New Product Launch Success

The launch of Amazfit Active 2 and Bip 6 received positive reviews and strong market reception, significantly increasing sales momentum.

Market Share Expansion

In Italy, Amazfit's market share of no SIM smartwatch unit sales reached 23.3% in March 2025, ranking second after Apple.

Improved Gross Margin

Achieved a gross margin of 37.3% in Q1 2025, higher than both Q4 2024 and Q1 2024, driven by new product launches.

Successful Cost Management

Despite a net loss, the cash balance only declined by roughly $6 million due to enhanced working capital management.

Upcoming Revenue Growth Forecast

Expecting significant year-over-year revenue growth of 23% to 35% in Q2 2025.

Negative Updates

Operating Profit Pressure

Fixed operating expenses were not fully absorbed by increased sales, putting pressure on operating profit.

Increased Operating Expenses

Operating expenses increased to $31.5 million in Q1 2025, mainly due to higher R&D and marketing expenses.

Tariff Impact

Tariffs on China-made products reduced gross margin by approximately 1 percentage point, with an expected full-year tariff impact of $2 million to $3 million.

Foreign Exchange Headwinds

Faced approximately $1 million in foreign exchange headwinds during the quarter.

Company Guidance

During Zepp Health Corporation's first quarter 2025 earnings call, the company provided guidance indicating a positive outlook for the year. Amazfit revenue experienced a 10% year-over-year growth, marking a significant milestone after two years of transformation. The U.S. market is vital, contributing 15% of revenue, with tariffs currently having a minimal impact. The company aims to achieve a 23% to 35% year-over-year increase in revenue for the second quarter, driven by new product launches and strategic partnerships. Despite first-quarter fixed operating expenses not being fully absorbed by increased sales, Zepp expects improvements in profitability in upcoming quarters. The company's gross margin was 37.3%, with anticipation for further expansion throughout 2025. Operating expenses are targeted to be between $25 million and $27 million per quarter, with an emphasis on cost management while continuing to invest in R&D and marketing. Zepp Health remains optimistic about achieving its first year-over-year growth in overall sales since 2021, guided by product innovation, strengthened partnerships, and an expanding global presence.

Zepp Health Financial Statement Overview

Summary

Zepp Health faces significant financial challenges, with declining revenue, negative profitability, and weak cash flow generation. Although the balance sheet remains relatively stable with a solid equity base, the company must address operational inefficiencies and improve profitability to enhance its financial health.

Income Statement

Negative

Zepp Health has experienced significant revenue decline and negative profit margins. The gross profit margin has decreased from previous years, and the net income has turned negative, indicating operational challenges. Additionally, both EBIT and EBITDA margins are negative, reflecting ongoing profitability issues.

Balance Sheet

Neutral

The company maintains a strong equity position relative to its total assets, which is a positive indicator of financial stability. However, the return on equity is negative due to net losses, and the debt-to-equity ratio is low, suggesting manageable leverage but limited ability to generate returns on equity.

Cash Flow

Negative

Zepp Health shows improvement in free cash flow from the previous year, but the operating cash flow remains weak relative to net income, indicating inefficiencies in cash generation. The free cash flow to net income ratio highlights challenges in converting revenue into cash flow.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
1.22B	2.50B	4.14B	6.25B	6.43B	5.81B
	Gross Profit
450.12M	657.78M	803.12M	1.31B	1.33B	1.47B
	EBIT
-192.62M	-207.10M	-410.24M	93.94M	78.22M	606.48M
	EBITDA
-169.22M	-134.39M	-354.09M	93.94M	105.35M	623.70M
	Net Income Common Stockholders
-205.96M	-212.12M	-306.66M	95.92M	228.75M	575.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
162.39M	985.62M	920.95M	1.49B	2.30B	1.82B
	Total Assets
972.90M	636.53M	5.27B	6.09B	5.90B	5.17B
	Total Debt
12.66M	196.08M	1.68B	1.26B	680.92M	111.34M
	Net Debt
-140.49M	62.20M	797.71M	-208.74M	-1.59B	-1.69B
	Total Liabilities
942.72M	283.22M	2.58B	3.15B	3.17B	2.68B
	Stockholders Equity
30.18M	2.49B	2.67B	2.92B	2.73B	2.50B
Cash Flow		Free Cash Flow
0.00	40.46M	-5.46B	-285.52M	72.53M	381.88M
	Operating Cash Flow
0.00	42.13M	-5.40B	-232.44M	157.30M	428.00M
	Investing Cash Flow
0.00	7.72M	-289.55M	-1.07B	-206.88M	-112.70M
	Financing Cash Flow
0.00	-295.04M	1.98B	551.08M	564.67M	25.61M

Zepp Health Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.36

Price Trends

50DMA

2.68

Negative

100DMA

2.82

Negative

200DMA

2.99

Negative

Market Momentum

MACD

-0.06

Positive

RSI

44.42

Neutral

STOCH

39.57

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZEPP, the sentiment is Negative. The current price of 2.36 is below the 20-day moving average (MA) of 2.61, below the 50-day MA of 2.68, and below the 200-day MA of 2.99, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 44.42 is Neutral, neither overbought nor oversold. The STOCH value of 39.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZEPP.

Zepp Health Risk Analysis

Zepp Health disclosed 72 risk factors in its most recent earnings report. Zepp Health reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

The cooperation with the securities regulatory authorities between China and the United States may not be efficient. Q4, 2023

Our growth through acquisitions may be affected by certain PRC regulations. Q4, 2023

If we are deemed to be an investment company under the Investment Company Act of 1940, applicable restrictions could have a material adverse effect on our business and the price of our ADSs and Class A ordinary shares. Q4, 2023

Zepp Health Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$11.55B	10.41	-6.86%	2.93%	7.50%	-8.30%
VUZI	55 Neutral	$220.34M	―	-136.11%	―	-46.37%	-34.50%
GPRO	54 Neutral	$101.45M	―	-83.57%	―	-20.88%	62.21%
ZEPP	48 Neutral	$34.22M	―	-28.57%	―	-39.27%	-211.36%
UEIC	48 Neutral	$87.19M	―	-13.55%	―	-2.15%	52.80%
KOSS	45 Neutral	$53.82M	―	-2.44%	―	-0.34%	32.41%
WLDS	40 Underperform	$1.72M	―	-167.89%	―	536.59%	-5.05%

* Technology Sector Average

Performance Comparison

ZEPP

Zepp Health

2.47

-0.50

-16.84%

GPRO

GoPro

0.66

-0.82

-55.41%

KOSS

Koss

5.81

1.03

21.55%

UEIC

Universal Electronics

6.78

-5.22

-43.50%

VUZI

Vuzix

3.18

1.70

114.86%

WLDS

Wearable Devices Ltd.

1.67

-25.93

-93.95%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.