Tuya Inc. (NYSE:TUYA): Exploring Valuation After Strong H1 2025 Revenue and Profit Growth

Tuya (NYSE:TUYA) just released its interim report for the first half of 2025, and investors are already weighing what these figures mean for future returns. The report details an uptick in both revenue and profits, attributes that many look for in a company positioned to capitalize on rapidly growing markets. By highlighting its momentum in IoT solutions, where connected smart devices and cloud platforms are shaking up traditional industries, Tuya seems determined to make its long-term vision clear to both current and prospective shareholders.

In the wake of the report, Tuya’s stock has bounced around a bit, but the larger story is still about steady progress. Over the past year, shares are up over 51%, with gains of 43% year-to-date and a nearly 8% bump across the past three months. While the week-to-week numbers remain volatile, momentum appears to be building as investors digest improved financial performance and rising profitability. This follows other recent developments, including changes in major shareholder positions and ongoing enthusiasm around the company’s leadership in the IoT sector.

With Tuya’s latest financials boosting the stock’s fundamentals, the big question now is whether this is a prime entry point for long-term investors, or if the recent momentum already reflects all the growth that markets expect ahead.

Most Popular Narrative: 25% Undervalued

According to the prevailing narrative, Tuya's shares are trading below what analysts believe to be a fair value, based on expectations of future earnings growth and expanding profit margins. The current discount is seen as an enticing opportunity for investors searching for technology-driven growth stories with significant runway.

Accelerating integration of AI capabilities in nearly all shipped product categories, along with robust developer engagement, signal Tuya's ability to capitalize on the shift toward autonomous, intelligent IoT devices. This may support higher revenue growth, increased platform stickiness, and margin expansion as AI solutions become core to customer offerings.

This is not your average tech valuation story. Want to know which bold assumptions could turn today's discount into tomorrow's premium? The driving force behind this narrative is a mix of market-beating growth projections, ambitious profit margins, and an earnings multiple that demands attention. Curious what is powering that headline fair value? Unlock the full projections and discover the numbers that make up this ambitious target.

Result: Fair Value of $3.32 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing global trade uncertainties and intense competition could pressure Tuya’s growth trajectory and profitability. This may cast some doubt on these optimistic forecasts.

Find out about the key risks to this Tuya narrative.

Another View: Industry Comparison

Looking at Tuya from an industry lens, its valuation stands above the average for US software companies. This approach suggests the stock could actually be expensive right now. Which view will prove right?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Tuya to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Tuya Narrative

If you see the numbers differently or want to explore a story not covered here, it only takes a few minutes to dive in and shape your own perspective. Do it your way

A great starting point for your Tuya research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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