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

Discover ZTO EXPRESS CAYMAN INC-ADR (NYSE:ZTO)—an undervalued stock our stock screener has picked out. NYSE:ZTO demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

Deciphering NYSE:ZTO's Valuation Rating

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:ZTO boasts a 7 out of 10:

• Based on the Price/Earnings ratio, ZTO is valued a bit cheaper than 68.75% of the companies in the same industry.
• ZTO is valuated rather cheaply when we compare the Price/Earnings ratio to 24.28, which is the current average of the S&P500 Index.
• Based on the Price/Forward Earnings ratio of 11.80, the valuation of ZTO can be described as reasonable.
• Based on the Price/Forward Earnings ratio, ZTO is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
• When comparing the Price/Forward Earnings ratio of ZTO to the average of the S&P500 Index (19.41), we can say ZTO is valued slightly cheaper.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ZTO indicates a somewhat cheap valuation: ZTO is cheaper than 68.75% of the companies listed in the same industry.
• 62.50% 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 23.01% in the coming years. This may justify a more expensive valuation.

Assessing Profitability for NYSE:ZTO

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:ZTO scores a 7 out of 10:

• ZTO has a better Return On Assets (10.13%) than 87.50% of its industry peers.
• With a decent Return On Equity value of 14.86%, ZTO is doing good in the industry, outperforming 68.75% of the companies in the same industry.
• ZTO has a better Return On Invested Capital (10.84%) than 75.00% of its industry peers.
• The 3 year average ROIC (8.39%) for ZTO is below the current ROIC(10.84%), indicating increased profibility in the last year.
• With an excellent Profit Margin value of 22.13%, ZTO belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
• ZTO has a Operating Margin of 25.21%. This is amongst the best in the industry. ZTO outperforms 100.00% of its industry peers.
• ZTO's Gross Margin of 29.42% is fine compared to the rest of the industry. ZTO outperforms 62.50% of its industry peers.

Health Examination for NYSE:ZTO

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:ZTO has achieved a 6 out of 10:

• An Altman-Z score of 4.51 indicates that ZTO is not in any danger for bankruptcy at the moment.
• ZTO's Altman-Z score of 4.51 is amongst the best of the industry. ZTO outperforms 81.25% of its industry peers.
• The Debt to FCF ratio of ZTO is 1.61, which is an excellent value as it means it would take ZTO, only 1.61 years of fcf income to pay off all of its debts.
• With a decent Debt to FCF ratio value of 1.61, ZTO is doing good in the industry, outperforming 68.75% of the companies in the same industry.
• ZTO has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
• The Debt to Equity ratio of ZTO (0.25) is better than 68.75% of its industry peers.
• With a decent Quick ratio value of 1.31, ZTO is doing good in the industry, outperforming 62.50% of the companies in the same industry.

How We Gauge Growth for NYSE:ZTO

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:ZTO boasts a 8 out of 10:

• The Earnings Per Share has grown by an impressive 40.39% over the past year.
• ZTO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.52% yearly.
• Looking at the last year, ZTO shows a quite strong growth in Revenue. The Revenue has grown by 13.18% in the last year.
• Measured over the past years, ZTO shows a very strong growth in Revenue. The Revenue has been growing by 22.05% on average per year.
• The Earnings Per Share is expected to grow by 18.42% on average over the next years. This is quite good.
• The Revenue is expected to grow by 11.91% on average over the next years. This is quite good.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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

Check the latest full fundamental report of ZTO for a complete fundamental analysis.

Keep in mind

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