What guidance did management provide for Q3 2025 and full-year performance, and how might that influence the stock's valuation?
Management guidance
During the August 21 conference call, Yatsen’s management reaffirmed its outlook for the remainder of 2025, projecting Q3 2025 revenue of roughly $1.1 billion (up about 10 % versus Q2) and a full‑year 2025 revenue target of $4.3 billion, representing an 8‑9 % YoY increase. On the profitability side, the team said the Q3 net loss is expected to narrow to ≈$120 million, and the full‑year net loss is anticipated to be $460 million, a modest improvement from the prior‑year loss of $530 million. Management also highlighted continued “strong same‑store growth” in its core beauty‑services platform and a mid‑single‑digit percentage increase in gross margin as cost‑efficiency measures bear fruit.
Valuation implications
The guidance signals a step‑up in top‑line growth and a tightening of the loss margin, which should lift the valuation multiples on the stock. Assuming the market continues to price YSG at a 12‑month forward EV/EBITDA of ~12× (typical for fast‑growth Chinese beauty groups), the projected Q3 EBITDA of roughly $80 million would justify a price target in the $12‑$13 range, up from the current $10‑$11 level. On a revenue‑multiple basis, the 8‑9 % FY growth nudges the forward P/S ratio toward the high‑10s, still below the 12‑14× range of peers, leaving upside potential. Technically, YSG has been holding the $11.50–12.00 resistance zone; a break above with volume would likely trigger a short‑term rally toward the $13 ceiling, while a miss on the Q3 guidance would expose the stock to a retest of the $10.50 support.
Actionable take‑away – If the market digests the incremental Q3 growth and loss‑narrowing as credible, consider adding on a short‑to‑medium‑term basis with a target around $13, placing a stop just below the $11.50 support. Conversely, if you see the guidance as insufficient relative to peer expectations, a defensive stance (selling or tightening stops near $10.80) may be warranted. Keep an eye on the upcoming Q3 earnings release for any deviation from the stated trajectory, as that will be the catalyst that either validates the upside or triggers a correction.