For those who appreciate value investing, NYSE:ZTO is a compelling option with its solid fundamentals.

Last update: Mar 5, 2024

Our stock screener has spotted ZTO EXPRESS CAYMAN INC-ADR (NYSE:ZTO) as an undervalued stock with solid fundamentals. NYSE:ZTO shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Valuation Analysis for NYSE:ZTO

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:ZTO has achieved a 7 out of 10:

Based on the Price/Earnings ratio, ZTO is valued a bit cheaper than 76.47% of the companies in the same industry.
When comparing the Price/Earnings ratio of ZTO to the average of the S&P500 Index (25.93), we can say ZTO is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 11.05, the valuation of ZTO can be described as reasonable.
82.35% of the companies in the same industry are more expensive than ZTO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.91. ZTO is valued slightly cheaper when compared to this.
Based on the Enterprise Value to EBITDA ratio, ZTO is valued a bit cheaper than 64.71% 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 70.59% 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 21.11% in the coming years.

Assessing Profitability 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:

Looking at the Return On Assets, with a value of 10.13%, ZTO belongs to the top of the industry, outperforming 94.12% of the companies in the same industry.
ZTO has a better Return On Equity (14.86%) than 70.59% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.84%, ZTO is in the better half of the industry, outperforming 76.47% of the companies in the same industry.
The 3 year average ROIC (8.39%) for ZTO is below the current ROIC(10.84%), indicating increased profibility in the last year.
ZTO has a Profit Margin of 22.13%. This is amongst the best in the industry. ZTO outperforms 100.00% of its industry peers.
ZTO has a better Operating Margin (25.21%) than 100.00% of its industry peers.
The Gross Margin of ZTO (29.42%) is better than 64.71% of its industry peers.

A Closer Look at Health for NYSE:ZTO

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:ZTO, the assigned 6 for health provides valuable insights:

An Altman-Z score of 4.22 indicates that ZTO is not in any danger for bankruptcy at the moment.
ZTO has a better Altman-Z score (4.22) than 76.47% of its industry peers.
ZTO has a debt to FCF ratio of 1.61. This is a very positive value and a sign of high solvency as it would only need 1.61 years to pay back of all of its debts.
ZTO has a better Debt to FCF ratio (1.61) than 76.47% of its industry peers.
A Debt/Equity ratio of 0.25 indicates that ZTO is not too dependend on debt financing.
ZTO has a better Debt to Equity ratio (0.25) than 64.71% of its industry peers.
ZTO's Quick ratio of 1.31 is fine compared to the rest of the industry. ZTO outperforms 70.59% of its industry peers.

Growth Analysis for 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 6 for growth:

The Earnings Per Share has grown by an impressive 40.39% over the past year.
ZTO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.52% yearly.
ZTO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.18%.
ZTO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.05% yearly.
ZTO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.28% yearly.

More Decent Value stocks can be found in our Decent Value screener.

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

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.