Zepp Health Corporation
Strong Q3: New Models Taking on Apple & Samsung
Published: Nov 6, 2025
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
Ticker & Exchange ZEPP: NYSE
Report Highlights
- Zepp’s Q3 revenue surged 78% YoY to $76M, at the top end of management’s $72–76M guidance, and 9% above our estimate. EPS improved 88% YoY, from ($0.05) to ($0.01), beating our estimate by 7%. The company nearly achieved positive EBITDA in Q3, and we expect Q4 EBITDA to turn positive.
- Global smartwatch shipments are projected to grow 6% in 2025 (consensus), supported by product upgrades, rising health awareness, AI integration, and broader wearables adoption.
- While Apple (NASDAQ: AAPL), Garmin (NYSE: GRMN), and Fitbit/Google (NASDAQ: GOOGL) have faced modest declines this year due to longer replacement cycles and market saturation in developed markets, Samsung (KOSE: 005930), Xiaomi (SEHK: 1810), Huawei, and Zepp are seeing strong growth, driven by affordable models, emerging market expansion, and robust feature adoption.
- Zepp’s revenue growth was driven by strong demand for its T-Rex 3 Pro (launched in Q3), Amazfit Balance 2 and Helio Strap (both Q2), and Bip 6, Active 2, and T-Rex 3 (all Q1).
- The T-Rex 3 Pro, a rugged smartwatch for endurance athletes, is priced at US$399 with offline mapping, 180+ sport modes, and up to 25 days battery life, offering a lower-cost alternative to Garmin’s Fenix line. We note that reviews praise its durability and functionality. The launch marks Zepp’s entry into the premium segment, targeting market share from Apple, Samsung, Garmin, and Google/Fitbit.
- Zepp continues to spend heavily on marketing (16% of Q3 revenue vs. 5–10% for larger players). While this pressures near-term profits, we believe it is prudent for smaller players to invest in marketing to boost exposure, particularly through initiatives like celebrity partnerships, as Zepp is doing. In Q3, Zepp expanded its brand ambassador program, adding several elite trail runners and marathoners.
- At the end of Q3, working capital and investments, net of long-term debt, totaled $177M, or $12/share. Management’s Q4 revenue guidance is $82–86M, up 40% YoY. Turning EBITDA positive, which we anticipate in Q4, will be a key milestone. ZEPP remains undervalued, trading at 1.71x forward revenue, well below the sector average of 4.31x.
Price and Volume (1-year)
* Zepp Health has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in US$ unless otherwise specified.
Unit Sales & Other Key Metrics
Fundamental Research Corp. Equity Rating Scale:
Fundamental Research Corp. Equity Rating Scale (ratings are not a recommendation to acquire, dispose of, or take no action regarding a security; the definition of our ratings are explained below):
- Buy – Fair value is 12% above the current market price; or risk and reward is favorable
- Hold – Fair value is between 5% to 12% above the current market price
- Sell – Fair value is 5% above, or less, than the current market value; or risk and reward is unfavorable
- Suspended or Rating N/A – Coverage and ratings suspended until more information can be obtained from the company regarding recent events.
Fundamental Research Corp. – Risk Rating Scale:
- (Low Risk) – The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.
- (Below Average Risk) – The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.
- (Average Risk) – The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient.
- (Speculative) – The company has little or no history of generating earnings or cash flow. Debt use is higher. These companies may be in start-up mode or in a turnaround situation. These companies should be considered speculative.
- (Highly Speculative) – The company has no history of generating earnings or cash flow. They may operate in a new industry with new, and unproven products. Products may be at the development stage, testing, or seeking regulatory approval. These companies may run into liquidity issues and may rely on external funding. These stocks are considered highly speculative.
Definition of FRC’s Fair Value Estimate – Our fair value estimate is the theoretical value of the company’s equity using widely accepted methods of valuation such as discount cash flow or comparables. IT IS NOT A TARGET PRICE or PREDICTION OF THE FUTURE STOCK PRICE.
Disclaimers and Disclosure
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Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. The analyst and Fundamental Research Corp.
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The distribution of FRC’s ratings are as follows: BUY (69%), HOLD (3%), SELL / SUSPEND (28%). Yorkton Equity Group Inc.
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