Zepp Health Soars 10.18% on Strategic Shift, Revenue Growth

On July 11, 2025, Zepp Health's stock surged by 10.18% in pre-market trading, marking a significant rise in investor interest and confidence in the company's future prospects.

Zepp Health has been transitioning from its previous business model of producing Xiaomi-branded wearables to developing its own Amazfit brand. This strategic shift has been met with positive investor sentiment, as the company forecasts a 30% revenue growth in the second quarter, its first rise in three years. This transition has also led to an increase in gross margins, rising from about 25% in 2019 to 37.3% in the first quarter of 2024.

The company's revenue has been on a downward trend in recent years, but the decline has moderated in the last two quarters. Zepp Health attributes this return to growth to two new products, the Amazfit Active 2 and the Bip 6, which have received positive reviews in the budget wearables category. The company is also expanding its geographic diversification, both in terms of sales and manufacturing, with plans to explore manufacturing in the NAFTA region.

Despite the recent rally, Zepp Health's stock still trades at a relatively low price-to-sales ratio, indicating potential for further upside. The company's operations seem to be improving, but investors will likely want to see continued growth and a return to profitability before giving it a longer-term thumbs up. The company's strategic shift and positive investor sentiment suggest a potential renaissance for U.S.-listed Chinese companies, as investors may be starting to look at existing ones in search of diamonds in the rough.