Zepp Health Corporation
Q1 Beat / Brighter Outlook for the Rest of the Year
Published: 5/24/2024
Author: FRC Analysts
Sector: Technology | Industry: Consumer Electronics
Ticker Symbols:
ZEPP - NYSE 🔹
Rating and Key Data
| Metrics | Value |
|---|---|
| Current Price | US $0.77 |
| Fair Value | US $5.19 |
| Risk | 3 |
| Week Range | US $0.77-2.10 |
| Shares O/S (M) | 65 |
| Market Cap. (M) | US $50 |
| Current Yield (%) | N/A |
| P/E (forward) | N/A |
| P/B | 0.2 |
- In Q1-2024, revenue was down 55% YoY, missing our estimate by 7% due to unit sales being 12% lower than expected. Despite lower revenue, EBITDA and EPS remained negative but showed improvement, significantly surpassing our estimates due to higher gross margins.
- Revenue declined due to no new product launches, and the company halting production of several low-margin products. This strategic move paid off as gross profit for self-branded units increased by 33% YoY, despite a 36% YoY decrease in revenue. Gross margins of self-branded units were up 21 pp to 40%, beating our estimate by 2 pp. Operating expenses were down 14% YoY, and in line with our estimate.
- In Q1, Zepp maintained its spot as the sixth-largest player in the global smartwatch market by revenue, trailing Apple (NASDAQ: AAPL), Garmin (NYSE: GRMN), Samsung (KOSE: A005930), Huawei, and Fitbit (Google/NASDAQ: GOOGL).
Rating and Key Data
| Metrics | Value |
|---|---|
| Current Price | US $0.77 |
| Fair Value | US $5.19 |
| Risk | 3 |
| Week Range | US $0.77-2.10 |
| Shares O/S (M) | 65 |
| Market Cap. (M) | US $50 |
| Current Yield (%) | N/A |
| P/E (forward) | N/A |
| P/B | 0.2 |
