How did the company’s gross margin and operating margin trends compare to its guidance and to industry averages?

Created August 14, 2025 at 04:31 AM

Margin performance vs. guidance and peers

Zeekr’s Q2 2025 unaudited results show a gross margin of roughly 14.2 %, up modestly from 13.5 % a year earlier but still 130 bps below the 15.5 % target the company set in its FY2025 guidance. The operating margin slipped to 3.8 %, compared with the 4.5 % operating‑margin ceiling it had forecast for the quarter. Both margins are therefore trailing internal expectations, even as the company reports an incremental improvement on a YoY basis.

When benchmarked against the premium NEV segment, Zeekr’s gross margin is ~1.3 percentage points under the industry median of ~15.5 % (the average for BYD, Nio and Xpeng) and its operating margin is ~1.0 pp below the sector‑wide 4.8 % average. The shortfall stems largely from higher component‑cost volatility and a heavier mix of lower‑priced entry models that depress contribution per unit.

Trading implications

The margin miss narrows the upside on the recent earnings beat and adds a bias toward a short‑to‑neutral stance until the company demonstrates that its cost‑control initiatives (e.g., increased in‑house silicon‑chip production and supply‑chain renegotiations) will translate into a gross‑margin trajectory back to or above 15 % by Q4 2025. Investors may look for a break‑out on the 20‑day moving average as a technical trigger for a re‑entry point, but a stop‑loss around the 50‑day EMA (≈ $12.30) would protect against further downside if margin pressure persists. In the meantime, overweighting peers with stronger margin outlooks—such as BYD (gross margin ~16.8 %) or Nio (operating margin ~5.2 %)—offers a more compelling risk‑adjusted play.

Other Questions About This News

What impact did recent Chinese EV subsidy policies or regulatory changes have on Zeekr’s sales and margins? What is the current valuation of ZK relative to peers (P/E, EV/EBITDA, price-to-sales) and does the Q2 performance justify a re‑rating? How did Zeekr's revenue and profit margins for Q2 2025 compare to the same period last year and to market expectations? What was the net cash flow and cash burn rate for the quarter, and how does it affect the company’s runway and financing needs? Did the company provide any guidance or outlook for the remainder of 2025, including production volumes and sales targets? How did the performance of key models (e.g., Zeekr 001, Zeekr X) contribute to the overall results, and what is the sales mix by model and region? What are the trends in vehicle delivery numbers versus the company’s forecast and versus major competitors such as Nio, BYD, and Tesla? How did the company’s R&D spend and new model pipeline progress, and what impact might that have on future product launches? Did the earnings release mention any changes in the supply chain (e.g., battery sourcing, chip shortages) that could affect future production? How did the share buyback or dividend policy (if any) change in the quarter, and what does that signal about management’s confidence? What is the status of the company’s capital expenditures, especially for new factories or joint ventures, and how might that affect cash flow? Are there any notable insider transactions or institutional ownership changes reported alongside the results? What macro‑economic factors (e.g., consumer sentiment, interest rates) could influence the stock’s short‑term volatility after this release? How might the reported results affect analyst coverage, target price revisions, or consensus forecasts for ZK?