Zepp Health (ZEPP) AI Stock Analysis

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Zepp Health

(NYSE:ZEPP)

Rating:60Neutral

Price Target:

$15.00

▲(5.78%Upside)

Zepp Health's overall stock score is driven by a positive earnings call outlook and strong technical momentum. However, significant financial performance issues and valuation concerns weigh heavily on the score. Strategic improvements in financial management and profitability are critical for future growth.

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

Market Cap

$186.07M

Dividend YieldN/A

Average Volume (3M)852.04K

Price to Earnings (P/E)―

Beta (1Y)0.55

Revenue Growth-39.27%

EPS Growth-211.36%

CountryUS

Employees765

SectorTechnology

Sector Strength93

IndustryConsumer Electronics

Share Statistics

EPS (TTM)-0.08

Shares Outstanding7,042,547

10 Day Avg. Volume2,516,295

30 Day Avg. Volume852,040

Financial Highlights & Ratios

PEG Ratio-0.64

Price to Book (P/B)1.63

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 Upside-13.12% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Zepp Health Business Overview & Revenue Model

Company DescriptionZepp Health (ZEPP) is a global leader in smart wearable technology, specializing in the development and production of advanced fitness and health monitoring devices. The company operates within the technology and healthcare sectors, offering a range of products including smartwatches, fitness bands, and health data services. Zepp Health is committed to leveraging artificial intelligence and data analytics to deliver personalized health insights and improve the well-being of its users.

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: 410.07%|

Next Earnings Date:Aug 03, 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 revenues, increasing net losses, and negative cash flow. The company has high leverage and negative profitability metrics, posing risks for growth and sustainability.

Income Statement

Neutral

Zepp Health's income statement indicates a challenging financial period. The company has experienced negative revenue growth, with revenue declining significantly from 2020 to 2024. The gross profit margin has decreased over time, and the company has faced increasing net losses, as evidenced by the negative net profit margin. Additionally, EBIT and EBITDA margins have been negative, highlighting operational inefficiencies and financial struggles.

Balance Sheet

Neutral

The balance sheet shows a mixed picture. While the company has a reasonable equity ratio, indicating some level of financial stability, its debt-to-equity ratio has increased, reflecting higher leverage and potential financial risk. The return on equity (ROE) is negative due to net losses, which diminishes the attractiveness to equity investors. The company's equity has been declining, which could be a concern for long-term solvency.

Cash Flow

Negative

Zepp Health's cash flow statement reveals significant challenges. Operating cash flow has been negative in recent periods, and free cash flow has consistently been negative, indicating cash burn and reliance on external financing. The free cash flow to net income ratio is unfavorable due to ongoing net losses. These factors suggest liquidity issues and the need for strategic financial management to improve cash generation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	182.60M	2.50B	4.14B	6.25B	6.43B
Gross Profit	70.23M	657.78M	803.12M	1.31B	1.33B
EBITDA	-47.34M	-134.39M	-354.09M	93.94M	105.35M
Net Income	-75.73M	-212.12M	-306.66M	95.92M	228.75M
Balance Sheet
Total Assets	528.59M	636.53M	5.27B	6.09B	5.90B
Cash, Cash Equivalents and Short-Term Investments	92.07M	985.62M	920.95M	1.49B	2.30B
Total Debt	182.14M	195.77M	1.68B	1.26B	680.92M
Total Liabilities	275.87M	283.22M	2.58B	3.15B	3.17B
Stockholders Equity	251.59M	2.49B	2.67B	2.92B	2.73B
Cash Flow
Free Cash Flow	-25.88M	40.92M	-5.46B	-285.52M	72.53M
Operating Cash Flow	-24.39M	42.60M	-5.40B	-232.44M	157.30M
Investing Cash Flow	-1.58M	7.73M	-289.55M	-1.07B	-206.88M
Financing Cash Flow	477.00K	-41.68M	1.98B	551.08M	564.67M

Zepp Health Technical Analysis

Technical Analysis Sentiment

Positive

Last Price14.18

Price Trends

50DMA

3.72

Positive

100DMA

3.28

Positive

200DMA

3.19

Positive

Market Momentum

MACD

2.64

Negative

RSI

85.48

Negative

STOCH

87.42

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZEPP, the sentiment is Positive. The current price of 14.18 is above the 20-day moving average (MA) of 5.50, above the 50-day MA of 3.72, and above the 200-day MA of 3.19, indicating a bullish trend. The MACD of 2.64 indicates Negative momentum. The RSI at 85.48 is Negative, neither overbought nor oversold. The STOCH value of 87.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	¥228.43B	14.64	7.50%	2.70%	9.28%	6.70%
ZEPP	60 Neutral	$186.07M	―	-28.57%	―	-39.27%	-211.36%
UEIC	55 Neutral	$82.84M	―	-13.55%	―	-2.15%	52.80%
GPRO	52 Neutral	$124.16M	―	-83.57%	―	-20.88%	62.21%
KOSS	46 Neutral	$49.41M	―	-2.44%	―	-0.34%	32.41%
VUZI	46 Neutral	$180.69M	―	-136.11%	―	-46.37%	-34.50%
WLDS	39 Underperform	$1.63M	―	-167.89%	―	536.59%	-5.05%

* Technology Sector Average

Performance Comparison

ZEPP

Zepp Health

14.18

11.78

490.83%

GPRO

GoPro

0.78

-0.80

-50.63%

KOSS

Koss

5.32

-3.61

-40.43%

UEIC

Universal Electronics

6.51

-5.59

-46.20%

VUZI

Vuzix

2.46

1.14

86.36%

WLDS

Wearable Devices Ltd.

1.60

-34.27

-95.54%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 18, 2025