Critical Analysis: Zepp Health (NYSE:ZEPP) and Pulmonx (NASDAQ:LUNG)

Zepp Health (NYSE:ZEPP) and Pulmonx (NASDAQ:LUNG) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Volatility and Risk

Zepp Health has a beta of 1.78, indicating that its stock price is 78% more volatile than the S&P 500. Comparatively, Pulmonx has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Institutional and Insider Ownership

52.6% of Zepp Health shares are owned by institutional investors. Comparatively, 91.0% of Pulmonx shares are owned by institutional investors. 36.0% of Zepp Health shares are owned by company insiders. Comparatively, 6.8% of Pulmonx shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Zepp Health and Pulmonx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zepp Health	-14.70%	-15.64%	-6.03%
Pulmonx	-60.09%	-92.94%	-39.80%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Zepp Health and Pulmonx, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zepp Health	1	0	1	0	2.00
Pulmonx	1	2	4	0	2.43

Zepp Health presently has a consensus target price of $56.28, indicating a potential upside of 1,097.70%. Pulmonx has a consensus target price of $5.58, indicating a potential upside of 321.38%. Given Zepp Health’s higher possible upside, analysts plainly believe Zepp Health is more favorable than Pulmonx.

Earnings and Valuation

This table compares Zepp Health and Pulmonx”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zepp Health	$258.90 million	0.27	-$40.07 million	($2.52)	-1.86
Pulmonx	$90.50 million	0.62	-$54.00 million	($1.30)	-1.02

Zepp Health has higher revenue and earnings than Pulmonx. Zepp Health is trading at a lower price-to-earnings ratio than Pulmonx, indicating that it is currently the more affordable of the two stocks.

Summary

Zepp Health beats Pulmonx on 8 of the 14 factors compared between the two stocks.

About Zepp Health

Zepp Health Corporation operates as a smart wearable and health technology company worldwide. The company operates in two segments: Self-Branded Products and Others, and Xiaomi Wearable Products. It empowers users to live lives by optimizing health, fitness, and wellness journeys through its consumer brands, Amazfit, Zepp Clarity, and Zepp Aura. The company through its proprietary Zepp Digital Management Platform, which includes the Zepp OS, AI chips, biometric sensors, and data algorithms, delivers cloud-based 24/7 actionable insights and guidance to help users attain wellness goals. The company offers smart bands, watches, modules, and scales; and associated accessories, smart hearable products, sportswear, home fitness equipment, home appliances, and smart watch accessories. It also provides charts and graphs to display analysis of the activity and biometric data collected from users through its Zepp Life and Zepp mobile apps. It offers its products under the Amazfit and Zepp brand names in approximately 90 countries. The company was formerly known as Huami Corporation and changed its name to Zepp Health Corporation in February 2021. Zepp Health Corporation was founded in 2013 and is headquartered in Hefei, the People's Republic of China.

About Pulmonx

Pulmonx Corporation, a commercial-stage medical technology company, provides minimally invasive devices for the treatment of chronic obstructive pulmonary diseases. The company offers Zephyr Endobronchial Valve, a solution for the treatment of patients with hyperinflation associated with severe emphysema; and Chartis Pulmonary Assessment System, a balloon catheter and console system with flow and pressure sensors that are used to assess the presence of collateral ventilation. It also offers StratX Lung Analysis Platform, a cloud-based quantitative computed tomography analysis service that offers information on emphysema destruction, fissure completeness, and lobar volume to help identify target lobes for the treatment with Zephyr Valves. The company serves emphysema patients in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and internationally. The company was formerly known as Pulmonx and changed its name to Pulmonx Corporation in December 2013. Pulmonx Corporation was incorporated in 1995 and is headquartered in Redwood City, California.