For those who appreciate growth without the sticker shock, NYSE:ZTO is worth considering.

Last update: Oct 13, 2023

Our stock screener has singled out ZTO EXPRESS CAYMAN INC-ADR (NYSE:ZTO) as an attractive growth opportunity. NYSE:ZTO is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

Understanding NYSE:ZTO's Growth Score

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:ZTO, the assigned 8 reflects its growth potential:

ZTO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.39%, which is quite impressive.
Measured over the past years, ZTO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.52% on average per year.
The Revenue has grown by 13.18% in the past year. This is quite good.
The Revenue has been growing by 22.05% on average over the past years. This is a very strong growth!
Based on estimates for the next years, ZTO will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.55% on average per year.
The Revenue is expected to grow by 14.63% on average over the next years. This is quite good.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

How do we evaluate the Valuation for NYSE:ZTO?

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:ZTO scores a 6 out of 10:

ZTO's Price/Earnings ratio is a bit cheaper when compared to the industry. ZTO is cheaper than 62.50% of the companies in the same industry.
When comparing the Price/Earnings ratio of ZTO to the average of the S&P500 Index (25.71), we can say ZTO is valued slightly cheaper.
Based on the Price/Forward Earnings ratio, ZTO is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
ZTO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 18.80.
ZTO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ZTO is cheaper than 62.50% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ZTO is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
ZTO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of ZTO may justify a higher PE ratio.
ZTO's earnings are expected to grow with 22.52% in the coming years. This may justify a more expensive valuation.

Health Analysis for NYSE:ZTO

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:ZTO scores a 6 out of 10:

An Altman-Z score of 4.75 indicates that ZTO is not in any danger for bankruptcy at the moment.
The Altman-Z score of ZTO (4.75) is better than 68.75% of its industry peers.
The Debt to FCF ratio of ZTO is 1.61, which is an excellent value as it means it would take ZTO, only 1.61 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.61, ZTO is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
ZTO has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.25, ZTO is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
With a decent Quick ratio value of 1.31, ZTO is doing good in the industry, outperforming 62.50% of the companies in the same industry.

What does the Profitability looks like for NYSE:ZTO

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:ZTO was assigned a score of 7 for profitability:

With an excellent Return On Assets value of 10.13%, ZTO belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
ZTO has a better Return On Equity (14.86%) than 62.50% of its industry peers.
With a decent Return On Invested Capital value of 10.84%, ZTO is doing good in the industry, outperforming 68.75% of the companies in the same industry.
The last Return On Invested Capital (10.84%) for ZTO is above the 3 year average (8.39%), which is a sign of increasing profitability.
The Profit Margin of ZTO (22.13%) is better than 100.00% of its industry peers.
With an excellent Operating Margin value of 25.21%, ZTO belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
The Gross Margin of ZTO (29.42%) is better than 68.75% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Check the latest full fundamental report of ZTO for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.