Want to rotate out of the AI/memory/space madness into actual physical products? ZEPP!
**Preface**
This won't be AI slop. I typed this up - well, most of it. And I won't claim to be a financial guru either. I'm just someone who's been trading for a while, and specifically watching for companies which have severely dropped in price. I am, however, a very experienced fitness enthusiast, a useless electrical engineer and finance degree holder, and a full time data scientist now working in strategy/financial data. And yes, obviously I want to benefit from this by growing some hype in the company.
Zepp is one of them.
Priced at $5 ($4.96 low last 14 days). I believe $10-20 is a fair price, $50-100 is the moonshot.
**Latest figures (prices from now, but other data from Q1 earnings)**
\- Market cap $77.6M
\- Cash/debt $103M/$61M
\- EV $36M
\- Gross margin 38.3%
\- EV/Sales 0.13x
**About/brief history**
\- Zepp Health owns Amazfit, a watch brand that is fast becoming a competitor to - or well, more like something in between Garmin and Apple watches. Not serious and rugged enough for your trail ultramarathons, but also far better battery life and features than Apple watches. The perfect everyday fitness watch.
\- They started as a manufacturing spinoff for Xiaomi, producing the Mi band.
\- They split off to produce their own products - the Amazfit line
\- Once the market realised their multi year bet had started working, stock price rocketed to the \~$68 dollar mark, but came back down to sane levels as the reality of a slow grind towards profitability sunk in
\- More recently, Zepp has entered a [partnership with Hyrox](https://us.amazfit.com/blogs/news/hyrox-and-amazfit-strengthen-alliance-with-global-three-year-partnership) (a while back - so somewhat already priced in). However, it's a three year contract and we're still waiting to see the effect on sales in the next statements.
\- I'm not the first to post about this on reddit, but it appears I'm the second. I'm not allowed to link to that because it counts as "promoting another sub"
**Cons/ risks**
\- Is a Chinese ADR. They have their headquarters moved to NL, and have offices in the US.
\- Not profitable yet (hence the low price), but projected to be in the next couple of quarters
\- Low trade volume: Trading at just \~$200k per day.
\- Memory prices affecting the next earnings call
\- A low price watch release from Garmin or Corox, or a more hardy exercise watch from Apple could ruin business
\- Debt numbers
**Pros**
\- \~45% revenue growth (versus 14% of garmin)
\- Ok, some AI. I asked Fable to project bear, base and bull scenarios based on fundamentals. No priming. Ask your AI to do the same, happy to see where we land differently. In my own analyses I landed at $7-20.
https://preview.redd.it/mdz4db1t2beh1.png?width=697&format=png&auto=webp&s=4d284114b1180d7ca2b140a3b37423040f2a367c
\- Low trade volume. The share is massively overlooked as everyone watches the memory, AI, space stocks. At some point, the collective attention will rotate to safer stocks - those selling actual physical goods. Only one analyst target, at around \~50
\- Still under a stock buyback scheme ($17M/$20M done)
\- The watches are getting really good reviews - here for example, here[ techradar calls the amazfit active 2 the best cheap watch in 2026](https://www.techradar.com/news/wearables/best-smart-watches-what-s-the-best-wearable-tech-for-you-1154074) and the [helio strap the best whoop alternative](https://www.techradar.com/best/best-fitness-trackers). Not all reviews are perfect, but they're getting reviewed by famous reviewers like DC Rainmaker regularly - a seat at the table is more than enough.
\- [The guy who just set the new mile world record was wearing one of their watches](https://us.amazfit.com/pages/amazfit-athlete-josh-kerr)
**- Most importantly, the watches just look damn good. The sensors now rival that of Garmin's. The software works. This is a bargain to the average buyer, and profitable for Zepp.**
https://preview.redd.it/s7njovhw3beh1.png?width=556&format=png&auto=webp&s=83b8c6af0a5732337bbd3024f3ede87df75562f8
**The make or break question: Will the upcoming quarterly results be good?**
Depends what's priced in. Q1 results were low, but Q1 is always low for similar products. Year on year, Q1 was up 25%.
The only idea I had was to take a shot at estimating sales based on reddit posts about the product in the amazfit subreddit. Posts per week is rising. Note the spikes in last July-Sept. That was due to soaring stocks.
I can say that sales are *probably* going to be up, but not by a ridiculous amount. Instead, we're looking at a steadily growing business here. (Devil's advocate - if you fit a non-straight line, you might decide that posts are constant, not rising, since January- HOWEVER, this is when sales are low for consumables like this - I still see these graphs as bullish)
https://preview.redd.it/yt6dfkwd0beh1.png?width=949&format=png&auto=webp&s=aad58bb988f69cc5aef911041c8058b2dc693f0b
More importantly, product sentiment is on the rise.
https://preview.redd.it/p1r1pvhj0beh1.png?width=943&format=png&auto=webp&s=5f0b200d36d7ed244896f1d1416bb9a6843aaa1a
So take a look yourself, do a due diligence!
And I'd love to hear your feedback and cynicism here - as I'm fairly heavily invested, so some cynicism might save me money :)
More technical info:
https://preview.redd.it/43hsx9so4beh1.png?width=680&format=png&auto=webp&s=037069fd0dd3f3842f6f6cca79fe443c6f6dcbdc