NYSE:ZTO, a growth stock which is not overvalued.

Last update: Nov 6, 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.

Growth Analysis for NYSE:ZTO

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:ZTO boasts a 8 out of 10:

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.
Looking at the last year, ZTO shows a quite strong growth in Revenue. The Revenue has grown by 13.18% in the last year.
Measured over the past years, ZTO shows a very strong growth in Revenue. The Revenue has been growing by 22.05% on average per year.
Based on estimates for the next years, ZTO will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.42% on average per year.
ZTO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.91% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Valuation Analysis for NYSE:ZTO

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:ZTO was assigned a score of 6 for valuation:

ZTO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.86.
ZTO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ZTO is cheaper than 75.00% of the companies in the same industry.
ZTO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 18.98.
Based on the Price/Free Cash Flow ratio, ZTO is valued a bit cheaper than 62.50% of the companies in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ZTO has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ZTO's earnings are expected to grow with 23.01% in the coming years.

How We Gauge Health for NYSE:ZTO

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:ZTO has earned a 6 out of 10:

An Altman-Z score of 4.83 indicates that ZTO is not in any danger for bankruptcy at the moment.
ZTO has a better Altman-Z score (4.83) than 81.25% 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.
A Debt/Equity ratio of 0.25 indicates that ZTO is not too dependend on debt financing.
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.
Looking at the Quick ratio, with a value of 1.31, ZTO is in the better half of the industry, outperforming 62.50% of the companies in the same industry.

What does the Profitability looks like for NYSE:ZTO

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:ZTO, the assigned 7 is noteworthy for profitability:

With an excellent Return On Assets value of 10.13%, ZTO belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
ZTO has a better Return On Equity (14.86%) than 68.75% of its industry peers.
With a decent Return On Invested Capital value of 10.84%, ZTO is doing good in the industry, outperforming 75.00% 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.
Looking at the Profit Margin, with a value of 22.13%, ZTO belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Operating Margin of ZTO (25.21%) is better than 100.00% of its industry peers.
ZTO's Gross Margin of 29.42% is fine compared to the rest of the industry. ZTO outperforms 62.50% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.