NYSE:ZTO is an undervalued gem with solid fundamentals.

Last update: Mar 29, 2024

ZTO EXPRESS CAYMAN INC-ADR (NYSE:ZTO) has caught the attention of our stock screener as a great value stock. NYSE:ZTO excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

What does the Valuation looks like for NYSE:ZTO

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:ZTO has earned a 7 for valuation:

Compared to the rest of the industry, the Price/Earnings ratio of ZTO indicates a somewhat cheap valuation: ZTO is cheaper than 76.47% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.48. ZTO is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 11.28, the valuation of ZTO can be described as reasonable.
Based on the Price/Forward Earnings ratio, ZTO is valued cheaper than 88.24% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ZTO to the average of the S&P500 Index (22.79), we can say ZTO is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, ZTO is valued a bit cheaper than the industry average as 70.59% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ZTO is valued a bit 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 20.99% in the coming years.

Assessing Profitability for NYSE:ZTO

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:ZTO scores a 7 out of 10:

ZTO has a better Return On Assets (10.13%) than 94.12% of its industry peers.
ZTO has a better Return On Equity (14.86%) than 70.59% of its industry peers.
ZTO has a Return On Invested Capital of 10.84%. This is amongst the best in the industry. ZTO outperforms 82.35% 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.
With an excellent Profit Margin value of 22.13%, ZTO belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Operating Margin, with a value of 25.21%, ZTO belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
ZTO's Gross Margin of 29.42% is fine compared to the rest of the industry. ZTO outperforms 64.71% of its industry peers.

Evaluating Health: NYSE:ZTO

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:ZTO has earned a 7 out of 10:

An Altman-Z score of 4.27 indicates that ZTO is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.27, ZTO belongs to the best of the industry, outperforming 82.35% of the companies in the same industry.
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.
ZTO's Debt to FCF ratio of 1.61 is amongst the best of the industry. ZTO outperforms 82.35% of its industry peers.
ZTO has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.25, ZTO is doing good in the industry, outperforming 70.59% of the companies in the same industry.
ZTO has a better Quick ratio (1.31) than 64.71% of its industry peers.

Growth Assessment of 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:

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.
ZTO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.52% yearly.
The Revenue has grown by 13.18% in the past year. This is quite good.
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.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of ZTO

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.