Q3 Disappoints / Encouraging Shift in Consumer Demand Toward Lower-Priced Players

Published: 11/21/2024

Author: FRC Analysts

Thumbnail of the report Q3 Disappoints / Encouraging Shift in Consumer Demand Toward Lower-Priced Players

*This report and research coverage is paid for and commissioned by Zepp Health Corporation - See the bottom of this report for other important disclosures rating, and risk definitions. All figures in C$ unless otherwise specified.

Sector: Technology | Industry: Consumer Electronics

Ticker Symbols:ZEPP - NYSE 🔹

Rating and Key Data

Metrics	Value
Current Price	US $2.71
Fair Value	US $14.65
Risk	3
52 Week Range	US $2.06-8.40
Shares O/S (M)	15
Market Cap. (M)	US $40
Current Yield (%)	N/A
P/E (forward)	N/A
P/B	0.1

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Report Highlights

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

Rating and Key Data

Metrics	Value
Current Price	US $2.71
Fair Value	US $14.65
Risk	3
52 Week Range	US $2.06-8.40
Shares O/S (M)	15
Market Cap. (M)	US $40
Current Yield (%)	N/A
P/E (forward)	N/A
P/B	0.1