When you look at NYSE:ZTO, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Our stock screening tool has pinpointed ZTO EXPRESS CAYMAN INC-ADR (NYSE:ZTO) as an undervalued stock option. NYSE:ZTO retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Understanding NYSE:ZTO's Valuation Score

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:

• ZTO's Price/Earnings ratio is a bit cheaper when compared to the industry. ZTO is cheaper than 72.22% of the companies in the same industry.
• Compared to an average S&P500 Price/Earnings ratio of 29.08, ZTO is valued rather cheaply.
• With a Price/Forward Earnings ratio of 9.90, the valuation of ZTO can be described as very reasonable.
• Based on the Price/Forward Earnings ratio, ZTO is valued cheaper than 100.00% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 20.74. ZTO is valued rather cheaply when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ZTO indicates a rather cheap valuation: ZTO is cheaper than 83.33% of the companies listed in the same industry.
• 72.22% of the companies in the same industry are more expensive than ZTO, based on the Price/Free Cash Flow ratio.
• The 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 15.62% in the coming years. This may justify a more expensive valuation.

Profitability Analysis for NYSE:ZTO

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:ZTO has earned a 7 out of 10:

• The Return On Assets of ZTO (9.46%) is better than 88.89% of its industry peers.
• The Return On Equity of ZTO (14.70%) is better than 72.22% of its industry peers.
• ZTO has a better Return On Invested Capital (11.21%) than 77.78% of its industry peers.
• The last Return On Invested Capital (11.21%) for ZTO is above the 3 year average (9.42%), which is a sign of increasing profitability.
• The Profit Margin of ZTO (21.59%) is better than 100.00% of its industry peers.
• ZTO has a better Operating Margin (26.21%) than 100.00% of its industry peers.
• ZTO's Gross Margin of 30.82% is fine compared to the rest of the industry. ZTO outperforms 66.67% of its industry peers.

Health Assessment of NYSE:ZTO

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:ZTO was assigned a score of 6 for health:

• ZTO has an Altman-Z score of 3.64. This indicates that ZTO is financially healthy and has little risk of bankruptcy at the moment.
• The Altman-Z score of ZTO (3.64) is better than 61.11% of its industry peers.
• The Debt to FCF ratio of ZTO is 2.54, which is a good value as it means it would take ZTO, 2.54 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of ZTO (2.54) is better than 77.78% of its industry peers.
• ZTO has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
• ZTO has a better Debt to Equity ratio (0.26) than 66.67% of its industry peers.

How do we evaluate the Growth for NYSE:ZTO?

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 5 reflects its growth potential:

• ZTO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.69%, which is quite good.
• The Earnings Per Share has been growing by 12.36% 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 8.06% in the last year.
• ZTO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.89% yearly.

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

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

Disclaimer

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.