ZTO Express (ZTO) AI Stock Analysis

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ZTO Express

(NYSE:ZTO)

Rating:78Outperform

Price Target:

$19.50

▲(14.30%Upside)

ZTO Express's strong financial performance, marked by solid revenue growth and profitability, is the primary driver of its overall score. The company's valuation is attractive, with a favorable P/E ratio and a robust dividend yield. Technical analysis indicates a bearish trend, but potential for stabilization exists. The absence of earnings call data and corporate events does not impact the score.

Positive Factors

Index Inclusion

The inclusion of ZTO H-share in the Hang Seng index could support the share price in the near term.

Revenue Growth

A projected 12% year-over-year growth in 1Q25 revenue indicates strong financial performance driven by increased express delivery volumes.

Valuation and Dividends

Analyst reiterates a Buy rating on ZTO given attractive valuation at 10.6x FY25 P/E and above-sector average dividend.

Negative Factors

Earnings Headwinds

The downgrade to Neutral is due to earnings headwinds and limited catalysts ahead.

Pricing Competition

A projected 10% decline in adjusted net profit for FY25 reflects ongoing industry price competition.

Share Buyback Delay

The pace of share buyback could be delayed, posing a risk to investor returns.

ZTO Express (ZTO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$13.99B

Dividend Yield4.07%

Average Volume (3M)3.13M

Price to Earnings (P/E)11.3

Beta (1Y)0.52

Revenue Growth13.41%

EPS Growth10.00%

CountryUS

Employees24,477

SectorIndustrials

Sector Strength83

IndustryIntegrated Freight & Logistics

Share Statistics

EPS (TTM)0.34

Shares Outstanding598,368,470

10 Day Avg. Volume2,325,391

30 Day Avg. Volume3,131,379

Financial Highlights & Ratios

PEG Ratio0.51

Price to Book (P/B)2.78

Price to Sales (P/S)0.00

P/FCF Ratio36.89

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$21.23

Price Target Upside24.44% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering7

ZTO Express Business Overview & Revenue Model

Company DescriptionZTO Express (Cayman) Inc. provides express delivery and other value-added logistics services in the People's Republic of China. The company offers delivery services for e-commerce and traditional merchants, and other express service users. As of December 31, 2021, it operated a fleet of approximately 10,900 trucks. The company was founded in 2002 and is headquartered in Shanghai, the People's Republic of China.

How the Company Makes MoneyZTO Express generates revenue primarily through its express delivery services, which constitute the bulk of its income. The company charges fees for parcel delivery, which vary based on factors such as distance, weight, and delivery speed. ZTO's extensive network and strategic partnerships with major e-commerce platforms enable it to secure a steady flow of parcels, contributing significantly to its revenue. Additionally, the company offers value-added logistics services, including warehousing and supply chain management, which provide supplementary income streams. ZTO's cost-efficient operations and economies of scale play a crucial role in optimizing its profitability.

ZTO Express Earnings Call Summary

Earnings Call Date:May 20, 2025

(Q3-2024)

% Change Since: -2.51%|

Next Earnings Date:Aug 13, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong growth in parcel volume and profitability, driven by strategic partnerships and cost efficiencies. However, challenges such as price competition and a revised growth outlook indicate pressures from market conditions. The sentiment is mixed with a balance of positive growth metrics and strategic challenges.

Q3-2024 Updates

Positive Updates

Parcel Volume Growth

ZTO's total parcel volume reached 8.72 billion, representing a 15.9% year-over-year growth.

Adjusted Net Profit Increase

The adjusted net profit for the quarter was CNY 2.39 billion, maintaining profitability ahead of peers.

Retail Parcel Growth

Retail parcels grew over 40% year-over-year, driven by partnerships with e-commerce platforms.

Revenue Increase

Total revenue increased 17.6% to CNY 10.7 billion.

Cost Efficiency Gains

Unit cost of line-haul transportation decreased by 9.7%, and unit sorting costs decreased by 6.4%.

Gross Profit and Margin Improvement

Gross profit increased by 23.2% to CNY 3.3 billion, and gross profit margin improved by 1.4 points to 31.2%.

Negative Updates

Price Competition Pressure

The optimization of revenue structure was needed to alleviate pressure due to price competition.

Revised Parcel Volume Guidance

Parcel volume for 2024 is revised to be in the range of 333 billion to 339 billion, indicating a slowdown in growth.

Challenges from Low-Value E-commerce Packages

The increasing proportion of low-value e-commerce packages presents new challenges to the corporate strategy.

Increased SG&A Expenses

SG&A expenses, excluding stock-based compensation, increased by 0.2 percentage points.

Company Guidance

During the third quarter of 2024 earnings call for ZTO Express, the company's leadership provided comprehensive guidance on their financial performance and strategic direction. The call highlighted a 15.9% year-over-year growth in parcel volume, reaching 8.72 billion parcels, and an adjusted net profit of CNY 2.39 billion. The total revenue increased by 17.6% to CNY 10.7 billion, with the gross profit margin improving to 31.2%. The guidance for the full year indicated an expected parcel volume between 333 billion to 339 billion, representing an 11.6% to 12.3% increase year-over-year. The focus was on maintaining service quality and profitability while adapting pricing strategies to stimulate high-volume daily average customers, particularly in the low-price e-commerce segment. The company also emphasized its strategic initiatives, including enhancing last-mile delivery systems and leveraging fintech tools to improve operational efficiency.

ZTO Express Financial Statement Overview

Summary

ZTO Express exhibits strong financial health with robust revenue growth, high profit margins, and efficient cost management. The balance sheet reflects low leverage and financial stability, complemented by substantial cash flow generation capabilities.

Income Statement

Very Positive

ZTO Express has shown robust growth in revenue, with a 15.26% increase from 2023 to 2024. The Gross Profit Margin and Net Profit Margin are strong at approximately 31% and 19.9%, respectively, indicating efficient cost management and profitability. EBIT and EBITDA margins are high, reinforcing operational efficiency and strong cash flow generation capacity.

Balance Sheet

Very Positive

The company maintains a healthy balance sheet with a Debt-to-Equity Ratio of 0.28, suggesting low leverage and financial stability. The Return on Equity (ROE) is impressive at 14.2%, reflecting efficient use of equity. The Equity Ratio is strong at 67.2%, indicating a solid capital structure with a high proportion of assets financed by equity.

Cash Flow

Positive

Free Cash Flow has grown significantly by 70.8% from 2023 to 2024, showcasing strong cash generation capabilities. The Operating Cash Flow to Net Income Ratio is 1.3, indicating that the company is generating ample cash from its operations. The Free Cash Flow to Net Income Ratio is also healthy at 1.3, reinforcing effective cash management relative to profitability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
44.28B	38.42B	35.38B	30.41B	25.21B
	Gross Profit
13.72B	11.66B	9.04B	6.59B	5.84B
	EBIT
11.78B	10.01B	7.74B	3.65B	3.36B
	EBITDA
15.04B	13.85B	11.15B	5.87B	5.20B
	Net Income Common Stockholders
8.82B	8.75B	6.81B	4.75B	4.31B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
22.31B	19.89B	17.45B	12.57B	17.90B
	Total Assets
92.34B	88.47B	78.52B	62.77B	59.20B
	Total Debt
17.35B	15.44B	13.12B	4.44B	2.51B
	Net Debt
3.88B	3.10B	1.43B	-5.28B	-11.70B
	Total Liabilities
29.67B	28.18B	24.05B	13.84B	10.11B
	Stockholders Equity
62.06B	59.80B	54.03B	48.64B	48.98B
Cash Flow		Free Cash Flow
5.53B	6.69B	4.07B	-2.11B	-4.26B
	Operating Cash Flow
11.43B	13.36B	11.48B	7.22B	4.95B
	Investing Cash Flow
-5.98B	-12.25B	-16.04B	-8.76B	-3.55B
	Financing Cash Flow
-5.00B	-769.84M	7.06B	-2.90B	8.34B

ZTO Express Technical Analysis

Technical Analysis Sentiment

Negative

Last Price17.06

Price Trends

50DMA

18.08

Negative

100DMA

18.70

Negative

200DMA

19.90

Negative

Market Momentum

MACD

-0.22

Negative

RSI

42.01

Neutral

STOCH

34.72

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZTO, the sentiment is Negative. The current price of 17.06 is below the 20-day moving average (MA) of 17.32, below the 50-day MA of 18.08, and below the 200-day MA of 19.90, indicating a bearish trend. The MACD of -0.22 indicates Negative momentum. The RSI at 42.01 is Neutral, neither overbought nor oversold. The STOCH value of 34.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZTO.

ZTO Express Risk Analysis

ZTO Express disclosed 95 risk factors in its most recent earnings report. ZTO Express reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

ZTO Express Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDX	79 Outperform	$54.33B	14.24	14.74%	2.48%	0.34%	-8.45%
ZTO	78 Outperform	$13.99B	11.27	15.68%	4.07%	13.41%	10.00%
UPS	74 Outperform	$85.60B	14.75	35.96%	6.58%	1.30%	-0.76%
EXPD	72 Outperform	$15.76B	19.11	37.70%	1.34%	24.07%	27.40%
CHRW	71 Outperform	$11.14B	22.42	32.11%	2.65%	-0.22%	65.52%
JBHT	68 Neutral	$14.13B	25.87	13.97%	1.26%	-3.82%	-12.80%
Sector *	66 Neutral	$4.46B	12.15	5.40%	4.71%	4.16%	-11.97%

* Industrials Sector Average

Performance Comparison

ZTO

ZTO Express

17.06

-3.65

-17.62%

CHRW

CH Robinson

93.41

8.06

9.44%

EXPD

Expeditors International

113.08

-11.56

-9.27%

FDX

FedEx

223.30

-24.04

-9.72%

JBHT

JB Hunt

139.01

-14.71

-9.57%

UPS

United Parcel

99.21

-30.28

-23.38%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.