Want To Invest In ZTO Express (Cayman) Inc (NYSE:ZTO)? Here’s How It Performed Lately
Analyzing ZTO Express (Cayman) Inc’s (NYSE:ZTO) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess ZTO’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. View our latest analysis for ZTO Express (Cayman)
Did ZTO’s recent earnings growth beat the long-term trend and the industry?
I prefer to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to analyze different companies on a more comparable basis, using new information. For ZTO Express (Cayman), its most recent earnings (trailing twelve month) is CN¥2.59B, which compared to last year’s figure, has moved up by 39.01%. Given that these figures may be fairly nearsighted, I’ve calculated an annualized five-year value for ZTO’s net income, which stands at CN¥1.71B This means that, on average, ZTO Express (Cayman) has been able to gradually grow its profits over the last couple of years as well.
How has it been able to do this? Let’s take a look at whether it is solely attributable to an industry uplift, or if ZTO Express (Cayman) has seen some company-specific growth. In the past few years, ZTO Express (Cayman) increased its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Looking at growth from a sector-level, the US logistics industry has been growing, albeit, at a muted single-digit rate of 8.12% over the past twelve months, and 5.55% over the previous five years. This suggests that any uplift the industry is benefiting from, ZTO Express (Cayman) is able to leverage this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as ZTO Express (Cayman) gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research ZTO Express (Cayman) to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
1. Future Outlook: What are well-informed industry analysts predicting for ZTO’s future growth? Take a look at this free research report of analyst consensus for ZTO’s outlook.
2. Financial Health: Is ZTO’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
