Don't overlook NYSE:ZTO—it's a hidden gem with strong fundamentals and an attractive price tag.

Last update: Aug 26, 2024

Our stock screening tool has identified ZTO EXPRESS CAYMAN INC-ADR (NYSE:ZTO) as an undervalued gem with strong fundamentals. NYSE:ZTO boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Looking at the Valuation

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 8 out of 10:

Compared to the rest of the industry, the Price/Earnings ratio of ZTO indicates a somewhat cheap valuation: ZTO is cheaper than 77.78% of the companies listed in the same industry.
ZTO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 30.04.
ZTO is valuated reasonably with a Price/Forward Earnings ratio of 9.55.
Based on the Price/Forward Earnings ratio, ZTO is valued cheaper than 100.00% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ZTO to the average of the S&P500 Index (21.67), we can say ZTO is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, ZTO is valued cheaper than 88.89% of the companies 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.
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.
ZTO's earnings are expected to grow with 16.60% in the coming years. This may justify a more expensive valuation.

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:

ZTO has a better Return On Assets (9.41%) than 83.33% of its industry peers.
ZTO's Return On Equity of 14.19% is fine compared to the rest of the industry. ZTO outperforms 72.22% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.88%, ZTO is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
The last Return On Invested Capital (10.88%) for ZTO is above the 3 year average (9.42%), which is a sign of increasing profitability.
ZTO has a better Profit Margin (21.24%) than 100.00% of its industry peers.
ZTO's Operating Margin of 26.40% is amongst the best of the industry. ZTO outperforms 100.00% of its industry peers.
With a decent Gross Margin value of 30.85%, ZTO is doing good in the industry, outperforming 66.67% of the companies in the same industry.

Understanding NYSE:ZTO's Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:ZTO has received a 6 out of 10:

ZTO has an Altman-Z score of 3.78. This indicates that ZTO is financially healthy and has little risk of bankruptcy at the moment.
ZTO's Altman-Z score of 3.78 is fine compared to the rest of the industry. ZTO outperforms 66.67% of its industry peers.
The Debt to FCF ratio of ZTO is 1.73, which is an excellent value as it means it would take ZTO, only 1.73 years of fcf income to pay off all of its debts.
ZTO has a better Debt to FCF ratio (1.73) than 77.78% of its industry peers.
ZTO has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.29, ZTO is in the better half of the industry, outperforming 66.67% of the companies in the same industry.

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 4 for growth:

Measured over the past years, ZTO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.36% on average per year.
ZTO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.89% yearly.

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

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

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.