RLX Technology (NYSE:RLX) has put fresh numbers on the table, with third quarter FY 2025 revenue at C¥1.03b and basic EPS of C¥0.17, set against a trailing twelve month basic EPS of C¥0.63 on revenue of C¥3.27b. The company has seen revenue move from C¥736.21m in Q4 2024 to C¥794.12m in Q2 2025 and then to C¥1.03b in Q3 2025. Quarterly basic EPS shifted from C¥0.10 in Q4 2024 to C¥0.18 in Q1 2025 before landing at C¥0.17 most recently, giving investors fresh data points on how headline growth is lining up with earnings. With net income over the period supporting a 23.4% margin compared with 29.8% a year earlier, the latest release puts the focus on how much of this top line scale is translating into durable profitability.

See our full analysis for RLX Technology.

With the latest figures in place, the next step is to see how these results align with the main stories around RLX, highlighting where the numbers support the prevailing views and where they start to challenge them.

TTM earnings growth but five year drag

• Over the last twelve months, net income was C¥764.3m on C¥3.27b of revenue, while five year earnings still show a 9.4% annualized decline and the latest quarterly net income sits at C¥203.2m on C¥1.03b of revenue.
• What stands out for the bullish view is the 18.8% earnings growth over the last year, set against that longer term 9.4% annualized decline and a Q3 2025 EPS of C¥0.17. Taken together, these figures test the claim that RLX is already on a durable growth path.
  • Bulls highlight international expansion and multi category smokeless products as drivers of stronger, less risky earnings, yet the five year earnings contraction signals that sustained growth is still a work in progress.
  • The recent step up from C¥121.96m net income in Q4 2024 to more than C¥200m in each 2025 quarter supports the bullish argument that the business has more earnings power, but the history of declines means investors may want more than one strong year before treating that as the new baseline.

Over the past year RLX’s reported turnaround has given bulls fresh talking points, but the five year earnings drag keeps the debate alive on how durable that shift really is. 🐂 RLX Technology Bull Case

Margins at 23.4% versus 29.8% peak

• The trailing net profit margin is 23.4% compared with 29.8% a year earlier, and within the latest run of results, net income of C¥203.2m on C¥1.03b of Q3 2025 revenue sits below Q1 2025 net income of C¥222.0m on C¥708.5m of revenue.
• Bears argue that tightening regulation and higher compliance costs will keep pressuring profitability. The move from a 29.8% margin to 23.4%, along with quarterly EPS drifting from C¥0.18 in Q1 2025 to C¥0.17 in Q3, lines up with the concern that future margins could sit well below current levels.
  • The bearish narrative already assumes margin compression from 24.9% to 17.0% over three years, and the current step down from last year’s 29.8% towards the low 20s gives numerical backing to the idea that margin headwinds are not just hypothetical.
  • At the same time, consistent profitability, with net income above C¥200m in each 2025 quarter so far, shows that even with lower margins the business is still generating meaningful earnings, which is a check on the most pessimistic outcomes.

For investors who worry about regulation and taxes, this margin profile is a concrete data point to compare against the more cautious long term scenarios. 🐻 RLX Technology Bear Case

P/E of 24.7x and DCF fair value gap

• RLX trades on a trailing P/E of 24.7x, below the cited peer average of 33x but above the Global Tobacco industry average of 13x, and against a current share price of US$2.25 there is a stated DCF fair value of US$3.86 and an analyst price target of US$2.89.
• Consensus narrative talks about growth from multi category products and international expansion. These valuation markers, with the share price sitting below both the US$2.89 analyst target and the US$3.86 DCF fair value while earnings still reflect a 23.4% margin and a 9.4% five year earnings decline, give a mixed read on whether the growth story is already fully reflected in the price.
  • The discount to the DCF fair value strongly aligns with the idea that the market is not pricing in the full earnings path that analysts expect, especially with trailing twelve month earnings of C¥764.3m.
  • On the other hand, a P/E above the industry average and a dividend yield of 4.85% that is not well covered by earnings show why some investors may see the current valuation as already baking in a fair amount of future success while carrying income related risk.
Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for RLX Technology on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this mix of growth, margins and valuation leaves you on the fence, it is worth looking through the numbers yourself and weighing the trade offs. To round out your view quickly, check our 3 key rewards and 2 important warning signs to see how the key risks stack up against the potential rewards.

See What Else Is Out There

RLX’s five year earnings drag, lower net margins versus last year and a dividend that is not well covered by earnings all point to a less secure profile.

If that mix of pressured profitability and income risk feels uncomfortable, shift your attention to 68 resilient stocks with low risk scores for companies with steadier fundamentals and potentially fewer surprises built into the story.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.