Despite its impressive fundamentals, NYSE:ZTO remains undervalued.

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.

Understanding NYSE:ZTO's Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:ZTO was assigned a score of 8 for valuation:

• 84.21% of the companies in the same industry are more expensive than ZTO, based on the Price/Earnings ratio.
• ZTO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.91.
• ZTO is valuated reasonably with a Price/Forward Earnings ratio of 10.76.
• Based on the Price/Forward Earnings ratio, ZTO is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
• ZTO's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.57.
• ZTO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ZTO is cheaper than 78.95% of the companies in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZTO indicates a rather cheap valuation: ZTO is cheaper than 89.47% of the companies listed 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.
• The decent profitability rating of ZTO may justify a higher PE ratio.
• A more expensive valuation may be justified as ZTO's earnings are expected to grow with 15.88% in the coming years.

Profitability Assessment of NYSE:ZTO

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:ZTO, the assigned 7 is a significant indicator of profitability:

• The Return On Assets of ZTO (9.41%) is better than 84.21% of its industry peers.
• ZTO has a better Return On Equity (14.19%) than 73.68% 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 73.68% 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's Profit Margin of 21.24% is amongst the best of the industry. ZTO outperforms 100.00% of its industry peers.
• ZTO has a Operating Margin of 26.40%. This is amongst the best in the industry. ZTO outperforms 100.00% of its industry peers.
• ZTO's Gross Margin of 30.85% is fine compared to the rest of the industry. ZTO outperforms 68.42% of its industry peers.

A Closer Look at Health for NYSE:ZTO

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:ZTO, the assigned 6 reflects its health status:

• ZTO has an Altman-Z score of 4.04. This indicates that ZTO is financially healthy and has little risk of bankruptcy at the moment.
• With a decent Altman-Z score value of 4.04, ZTO is doing good in the industry, outperforming 78.95% of the companies in the same industry.
• 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 78.95% of its industry peers.
• A Debt/Equity ratio of 0.29 indicates that ZTO is not too dependend on debt financing.
• ZTO has a Debt to Equity ratio of 0.29. This is in the better half of the industry: ZTO outperforms 63.16% of its industry peers.

Growth Insights: 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:

• ZTO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.68%, which is quite good.
• ZTO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.36% yearly.
• ZTO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.89% yearly.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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

Keep in mind

This article should in no way be interpreted as advice. 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.