Zepp Health Corporation
Q3 Disappoints / Encouraging Shift in Consumer Demand Toward Lower-Priced Players
Published: 11/21/2024
Author: FRC Analysts
*See important disclosures at the bottom of this reportSector: Technology | Industry: Consumer Electronics
Ticker Symbols:
ZEPP - NYSE 🔹
- In Q3-2024, revenue was up 4% QoQ, but down 49% YoY, missing our estimate by 11%, due to lower than anticipated unit sales. EBITDA remained negative, worsening YoY and QoQ, due to higher operating expenses.
- Revenue declined YoY due to the discontinuation of several low-margin products, new product launches being skewed toward late Q3, and stronger competition. In September 2024, Zepp launched the T-Rex 3, a rugged and affordable GPS smartwatch. While lacking some advanced features, we note that user reviews highlight it as a durable, reliable option for outdoor enthusiasts and athletes.
- Zepp expects Q4 revenue to rise 30%-60% QoQ ($55-$70M in Q4 vs $43M in Q3), driven by strong demand for the T-Rex 3, and its new Open Wearable Stereo (OWS) earbuds. The compa