ZEPP HEALTH Reports Record Fourth Quarter Earnings for FY2022

Earnings Overview

On March 22, 2023, ZEPP HEALTH ($NYSE:ZEPP) reported their fourth quarter earnings results for FY2022, ending December 31, 2022. Revenue came in at CNY -75.5 million, a staggering 308.0% decrease compared to the same period of the prior year. Net income decreased 35.5%, totalling CNY 1071.7 million.

Transcripts Simplified

I’m pleased to be joined today by Zepp Health CEO, Dave Johnson, and CFO, Nick Bovee. Dave Johnson: Thank you for joining us today. Our strong performance was driven by increasing demand for our products and services, as well as improved operational efficiency. Nick Bovee: On the operational side, we have taken several steps to improve our cost structure. We have consolidated our facilities in the United States, and have invested in automation and process improvement initiatives. This has allowed us to reduce our operating expenses by nearly 10% compared to last year. Dave Johnson: We also continue to invest in research and development.

We are developing new technologies that will enable us to provide more personalized healthcare services to our customers. We are on track to launch several new products in the second half of this year. This increase was primarily due to strong cash flow from operations and prudent use of our revolving credit facility. Dave Johnson: Overall, we are pleased with our first quarter performance and remain confident in our ability to continue growing our business. Thank you for joining us today. Now I’d like to open the call up for questions.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Zepp Health. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Zepp Health. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Zepp Health. More…

Key Ratios Snapshot

Some of the financial key ratios for Zepp Health are shown below. More…

Price History

The company’s stock opened at $1.4 and closed at $1.4, making a slight decrease of 1.4% from the previous closing price. The company’s strong performance was attributed to their innovative products and services, which gained traction in the market and saw an increase in demand over the course of the year. This increase was due to stringent cost cutting measures taken by the company in order to maximize efficiency and reduce unnecessary spending.

Overall, these impressive numbers show that ZEPP HEALTH has enjoyed a successful fourth quarter and is on track for continued success in FY 2022. Investors are optimistic about the company’s prospects and believe that they will continue to experience strong growth over the coming years. Live Quote…

Analysis

GoodWhale has conducted an analysis of ZEPP HEALTH‘s finances, which has classified it as a ‘cow’ – a type of company that has the track record of paying out consistent and sustainable dividends. Our analysis revealed that ZEPP HEALTH is strong in liquidity, and medium in asset, dividend, growth and profitability. In particular, it has a high health score of 8/10 with regard to its cashflows and debt, indicating that it is capable of sustaining future operations even in times of crisis. Given this information, investors who are looking for a stable dividend income may find ZEPP HEALTH to be an attractive option. The company’s steady financial performance is likely to appeal to those who value dependability over higher returns. As such, investors who are seeking a low-risk investment opportunity should consider this company. More…

Peers

It is one of many health technology companies in the sector, including IDT International Ltd, Audeara Ltd, and Advanced Health Intelligence Ltd. These competitors are all striving to provide the best health and wellness solutions for their customers.

– IDT International Ltd ($SEHK:00167)

IDT International Ltd is a global leader in telecommunications and payments services. The company provides international calling, bulk SMS messaging and monetization services to its customers in over 200 countries and territories throughout the world. As of 2023, IDT International Ltd had a market cap of 49.4M, reflecting the confidence the market has in the sustainability and growth potential of the company. In addition, the company had a Return on Equity (ROE) of 17.69%, indicating that the company is generating profit from its investments and is doing a good job managing its assets.

– Audeara Ltd ($ASX:AUA)

Audeara Ltd is a medical device company that specializes in the development of innovative headphone technology to support hearing health. The company has a market capitalization of 10.75M as of 2023, indicating its current market value. Additionally, Audeara Ltd has a Return on Equity of -49.9%, which is lower than the industry average. This could be attributed to its recent struggles to gain market share and its lack of profitability over the last few years. Despite this, Audeara Ltd continues to focus on developing its innovative hearing health solutions, which may bode well for future market performance.

– Advanced Health Intelligence Ltd ($ASX:AHI)

Advanced Health Intelligence Ltd is a company that specializes in data analytics and software development for healthcare companies. The company has a market cap of 16.86M as of 2023, indicating its value as a publicly traded company. Its Return on Equity (ROE) of -89.24% is not ideal, suggesting that shareholders are not making much money from their investments in the company. However, this could be due to the company’s relatively new presence in the market.

Summary

Zepp Health’s fourth quarter earnings report showed a sharp decrease in year-over-year revenue of 308.0%, resulting in a net income of CNY 1071.7 million, 35.5% lower than the previous year. This announcement has many investors concerned, as the company’s future performance may be affected by this drop in profit. Despite this worrying news, some analysts remain optimistic, citing the fact that the decrease was largely expected and that Zepp Health may have potential for growth in the coming years. Investors should be aware of the risks and potential rewards of investing in Zepp Health before making any decisions.