Zepp Health Corporation
Strong Execution, Deep Discount: Market Missing the Turnaround
Published: April 16, 2026
Author: FRC Analysts
Disclosure: Zepp Health Corporation has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Company Details
Sector – Technology
Industry – Consumer Electronics
Trading Information
Trading information – ZEPP : NASDAQ
Report Highlights
- 2025 Performance: Revenue rose 41% YoY to $259M, exactly in line with our estimate, driven by 30% growth in unit sales vs. 4% growth in global smartwatch shipments, and a 16% increase in selling prices. EPS improved from ($0.29) to ($0.16), but missed our ($0.11) estimate due to several one-time operating costs.
- Market Share & Growth Drivers: Zepp captured 1.9% of global smartwatch shipments in 2025, up from 1.5% in 2024. Growth was driven by new product launches, and increased marketing spend. In 2025, the company allocated 21% of revenue to sales and marketing, significantly above the 5–10% industry norm, and continues expanding its sports celebrity ambassador program.
- Product Launches & Reception: Zepp launched nine new products in 2025, and expects a similar number in 2026. We believe launches in late Q4-2025, and Q1 2026, including the Amazfit Active Max, Amazfit Active 3 Premium, and Amazfit T-Rex Ultra 2, should support robust revenue growth in H1-2026. Initial reviews highlight strong value relative to their price points, with bright displays, long battery life, and robust fitness tracking, though the products are slightly less polished/advanced than some premium competitors.
- Supply Chain Advantage: The global AI boom has created a shortage of high-density memory chips, but Zepp is less exposed than many competitors. Since its users prioritize health tracking, and battery life over memory-intensive apps, the company has lower reliance on expensive components, while competitors face rising hardware costs.
- Financial Position & Outlook: At the end of Q3, working capital and investments net of long-term debt totaled $167M (~$12/share). Management guided Q1-2026 revenue to $50–55M, representing ~35% YoY growth. With recent product launches, and strong guidance, we now expect EPS to turn positive in 2026 (previously 2027), ending a five-year streak of losses.
- FX Risk: The Middle East conflict has heightened risk-off sentiment, strengthening the US$, and creating near-term FX headwinds. While Zepp’s direct exposure is limited, we believe a stronger US$ may dilute reported international revenue. Higher energy costs may add cost pressure across the supply chain, although we view both effects as temporary.
- Valuation & Market Context: While the NASDAQ-100 Technology Sector is up 3% YTD, ZEPP is down 50%, a drop we view as disproportionate to its fundamentals. ZEPP trades at 0.45x forward revenue vs. the sector average of 3.27x, an 86% discount.
Price and Volume (1-year)
* Zepp Health has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in US$ unless otherwise specified.
Zepp ranks seventh in global smartwatch sales, behind Apple (NASDAQ: AAPL), Samsung (KOSE: 005930), Garmin (NYSE: GRMN), Fitbit/Google (NASDAQ: GOOGL), Xiaomi (SEHK: 1810), and Huawei. For perspective, Apple ships ~35M units annually; Zepp ships ~3M
Self-branded product shipments jumped 30% in 2025, beating our forecast by 3%, while global smartwatch shipments grew only 4% YoY
Unit Sales & Other Key Metrics
- In line with industry standards, Zepp retains 70% of the retail price of its products as revenue, while retailers and distributors keep the remaining 30%.
Zepp does not disclose segmented results:
- Smart wristbands, and watches, constitute 90%+ of revenue.
- Self-Branded Products – Europe & the Middle East account for 50% of sales, followed by North America ( 15-20 %), China (10%), and the rest of the world (15-30 %)
- Xiaomi Products – Starting Q1-2025, the company ceased manufacturing products for Xiaomi. Xiaomi owns 20% of Zepp’s outstanding shares
Source: FRC / Company
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