Huami Stock is a Small-Cap Play to Watch: What to do in the Lull?

Huami stock is currently trading for $10.91 USD on the NYSE. At current prices, shares are up roughly 3.81%; however, year-to-date they’re up 11.44%.

Let’s check out the Chinese fitness tracker maker.

Huami Stock

It looked different earlier in the year. By March 1, Huami (NYSE:HMI) was worth double what it is now. Shares were booming from a successful 2018 that saw the company control 13.5% of the global wearables market, according to IDC. The only company ahead of it was Apple (NASDAQ:AAPL), which controlled 26.8% of the market.

Huami was even ahead of former market leader Fitbit (NYSE:FIT), which had an 8% share.

Huami stock has been hit hard by the American/China trade war, which intensified earlier this year. But with shares on a low-ebb right now, traders who see the long-term potential here could be in for a win.

Potential with Huami

One interesting point to note is that Huami runs a tight ship with Chinese tech giant Xiaomi (OTCPK:XIACF). Xiaomi the company owns about a fifth of HMI, and Xiaomi CEO Lei Jun owns another fifth personally.

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Huami’s Amazfit wearables are sold at Xiaomi’s stores and are even paid for by Xiaomi. This makes the company more profitable than competitors like Fitbit, because “Xiaomi shoulders all the design, manufacturing, distribution, and marketing expenses for its Xiaomi-branded products.”

Aside from its relationship with Xiaomi, Huami has deals with Timex and PAI Health, which expand its own wearables ecosystem. Now, it has moved into producing hardware for such devices; for example, its Huangshan-1 AI chip developed for healthcare-oriented wearables.

Huami Stock and Revenue

The company is in good shape. According to the Motley Fool:

“Huami’s revenue and adjusted net income rose 78% and 106%, respectively, in 2018. Its full-year gross margin expanded from 24.1% to 25.8%, and its total shipments climbed 52% to 27.5 million. Fitbit’s shipments, by comparison, fell 9% to 13.9 million last year.”

Currently, the company has an average rating of “Buy” and a price target of $17.10 USD set by five analysts covering Huami stock.

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