NYSE:ZTO is showing decent growth, but is still valued reasonably.

ZTO EXPRESS CAYMAN INC-ADR (NYSE:ZTO) was identified as an affordable growth stock by our stock screener. NYSE:ZTO is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Evaluating Growth: NYSE:ZTO

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:ZTO has earned a 8 for growth:

• The Earnings Per Share has grown by an impressive 40.39% over the past year.
• The Earnings Per Share has been growing by 13.52% on average over the past years. This is quite good.
• Looking at the last year, ZTO shows a quite strong growth in Revenue. The Revenue has grown by 13.18% in the last year.
• The Revenue has been growing by 22.05% on average over the past years. This is a very strong growth!
• The Earnings Per Share is expected to grow by 18.42% on average over the next years. This is quite good.
• 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.

How do we evaluate the Valuation for NYSE:ZTO?

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:ZTO, the assigned 7 reflects its valuation:

• Based on the Price/Earnings ratio, ZTO is valued a bit cheaper than the industry average as 68.75% of the companies are valued more expensively.
• When comparing the Price/Earnings ratio of ZTO to the average of the S&P500 Index (24.55), we can say ZTO is valued slightly cheaper.
• Based on the Price/Forward Earnings ratio of 11.58, the valuation of ZTO can be described as reasonable.
• Based on the Price/Forward Earnings ratio, ZTO is valued cheaper than 81.25% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of ZTO to the average of the S&P500 Index (19.64), we can say ZTO is valued slightly cheaper.
• ZTO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ZTO is cheaper than 68.75% of the companies in the same industry.
• ZTO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ZTO is cheaper than 62.50% of the companies in the same industry.
• ZTO's 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.

Health Assessment of 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 4.46 indicates that ZTO is not in any danger for bankruptcy at the moment.
• ZTO has a better Altman-Z score (4.46) than 75.00% 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.
• The Debt to FCF ratio of ZTO (1.61) is better than 68.75% of its industry peers.
• 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 62.50% of the companies in the same industry.
• The Quick ratio of ZTO (1.31) is better than 62.50% of its industry peers.

Profitability Analysis 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:

• The Return On Assets of ZTO (10.13%) is better than 87.50% of its industry peers.
• ZTO's Return On Equity of 14.86% is fine compared to the rest of the industry. ZTO outperforms 68.75% of its industry peers.
• The Return On Invested Capital of ZTO (10.84%) is better than 75.00% of its industry peers.
• 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.
• ZTO's Operating Margin of 25.21% is amongst the best of the industry. ZTO outperforms 100.00% of its industry peers.
• ZTO has a better Gross Margin (29.42%) than 62.50% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Our latest full fundamental report of ZTO contains the most current fundamental analsysis.

Disclaimer

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.