Zepp Health stock has collapsed in 2026 despite Amazfit growth

Zepp Health’s share price has fallen by roughly 92% so far in 2026, dropping from around $27 at the end of last year to little more than $2 today. The odd part is that the Amazfit business underneath it has not suffered anything remotely resembling a 92% collapse.

If you only looked at the stock chart, you might assume something had gone badly wrong at Zepp Health. Instead, Amazfit has spent 2026 releasing new watches, moving further upmarket and growing revenue.

So what’s going on?

Last year’s huge rally is being unwound

The starting point helps to put things into perspective. Zepp Health was the standout wearable stock of 2025, climbing from $2.60 at the end of 2024 to $27.43 by the end of December. At one stage it traded above $60.

We covered that extraordinary run in our 2025 wearable stock roundup, where Zepp finished the year up around 955%. That rally was supported by real improvement in the business, but the size and speed of the move also left plenty of room for things to go wrong.

The reversal actually started before 2026. By November 2025, the shares had already fallen around 58% from their October peak. At the time, the conclusion was that investors were cooling on an explosive rally rather than reacting to some sudden collapse in Amazfit demand.

That process has continued this year. With ZEPP now trading around the low $2 range, the market has effectively erased almost the entire 2025 rally.

The financial story is much less dramatic

Zepp Health finished 2025 with revenue of $258.9 million, up 41.8% from $182.6 million a year earlier. The company was still losing money, but its net loss narrowed from $75.7 million in 2024 to $40.1 million, while gross margin reached 38.3%.

That was a pretty convincing turnaround from where the business had been. The problem for the stock is that investors then had to decide how quickly that improvement could continue.

The first quarter of 2026 still looked strong, with revenue rising 33.8% year over year to $51.5 million. But by Q2, growth had slowed sharply to 6.9%, with revenue reaching $63.5 million.

At the same time, Zepp is spending heavily. Q2 selling and marketing expenses rose from about $12.1 million to $18.3 million, while the quarterly net loss widened from $7.7 million to $11.3 million. For the first half of 2026, the company lost $31 million compared with $27.5 million a year earlier.

That is probably the part the market dislikes most. Revenue is growing, but the extra sales have not yet translated into sustained profitability.

Amazfit itself looks healthier than the stock chart

The strange thing is that the product side of the business has arguably improved during the same period. Zepp has pushed Amazfit further beyond its old budget-watch image, with more expensive T-Rex and Balance models sitting alongside lower-cost Bip and Active devices.

The numbers suggest buyers are accepting some of those higher prices. Zepp said higher-end T-Rex models represented around half of T-Rex activations, while the more expensive Active tier increased its share of Active-family activations during Q2. The company also said demand for Helio Strap exceeded available supply.

In our look at Zepp’s remaining 2026 launches, the company had already pushed through an unusually busy year of new hardware and was starting to shift its attention from launching products to actually getting them into stores and onto wrists.

But there is a downside to all that activity. More launches mean more marketing, sponsorships, retail costs and development spending, and that is showing up in the accounts.

Zepp is essentially asking investors to be patient while it spends to build Amazfit into a more premium global brand. The market does not appear particularly interested in waiting.

At around $2 to $3 per share, ZEPP is back near levels seen before last year’s rally. That’s even though revenue is substantially higher, gross margins have improved and Amazfit has a broader product range than it did back then.

This does not automatically make the stock cheap. Zepp is still losing money, growth slowed substantially in Q2 and the company guided Q3 revenue to between $68 million and $73 million, which would represent a year-on-year decline of roughly 4% to 10%.

Amazfit does not need another 70% growth quarter to prove the business is improving. But Zepp does need to show that all the spending on products, marketing and brand building can eventually turn into consistent profits.

Amazfit users have their own theories

Amazfit users have noticed the disconnect too. In a recent community discussion, most of the criticism was aimed not at the hardware, but at Zepp’s strategy. Some questioned the heavy HYROX focus, while others argued that Amazfit now has too many similar watches and gives away so many features on cheaper models that it becomes harder to justify the premium ones.

There were also complaints about software polish, third-party integrations and navigation still trailing Garmin. The counterpoint was that Zepp may simply be spending heavily now to build Amazfit into a stronger global brand. That split mirrors the stock story pretty well: the products are competitive, but investors still want proof that all this spending can turn into consistent profits.