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Why Is ZTO Express Cayman Inc. (ZTO) Up 4% Since Last Earnings Report?
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It has been about a month since the last earnings report for ZTO Express Cayman Inc. (ZTO - Free Report) . Shares have added about 4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ZTO Express Cayman Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
ZTO Express Q2 Earnings Beat Estimates
ZTO Express' second-quarter 2022 earnings of 33 cents per share beat the Zacks Consensus Estimate of 27 cents. The bottom line surged year over year despite higher operating expenses and the impact of Omicron-induced woes.
Total revenues of $1,292.4 million improved year over year, owing to a rise in revenues at the core express delivery services unit (contributing 91.6% to the top line).
Detailed Operational Statistics
Revenues in Express delivery services jumped 18.8% year over year due to a 7.5% increase in parcel volume and an 10.5% increase in parcel unit price. Parcel volume market share was 21.6% in the reported quarter.
Freight forwarding services’ revenues grew 5.2% year over year, with cross-border e-commerce demand and pricing returning to a normal level post recovery from the pandemic.
Revenue from sales of accessories climbed 11.3% year over year.
Total operating expenses of this China-based company came in at RMB 217.3 million compared with RMB 218 million in the year-ago quarter. Selling, general and administrative expenses increased 16% on the back of the rise in compensation and benefits.
Gross margin rate improved to 25.4% from 22.8% in the year-ago period. As of Jun 30, 2022, ZTO Express repurchased 36.07 million ADSs at an average purchase price of $25.21.
Liquidity
ZTO Express exited the second quarter of 2022 with cash and cash equivalents of RMB9.93 billion compared with RMB9.90 billion at the end of March 2022.
View Intact
ZTO Express has reinstated its expectation for parcel volumes in 2022 to 24.96-25.86 billion. The guided range represents an increase of 12-16% year over year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, ZTO Express Cayman Inc. has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise ZTO Express Cayman Inc. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is ZTO Express Cayman Inc. (ZTO) Up 4% Since Last Earnings Report?
It has been about a month since the last earnings report for ZTO Express Cayman Inc. (ZTO - Free Report) . Shares have added about 4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ZTO Express Cayman Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
ZTO Express Q2 Earnings Beat Estimates
ZTO Express' second-quarter 2022 earnings of 33 cents per share beat the Zacks Consensus Estimate of 27 cents. The bottom line surged year over year despite higher operating expenses and the impact of Omicron-induced woes.
Total revenues of $1,292.4 million improved year over year, owing to a rise in revenues at the core express delivery services unit (contributing 91.6% to the top line).
Detailed Operational Statistics
Revenues in Express delivery services jumped 18.8% year over year due to a 7.5% increase in parcel volume and an 10.5% increase in parcel unit price. Parcel volume market share was 21.6% in the reported quarter.
Freight forwarding services’ revenues grew 5.2% year over year, with cross-border e-commerce demand and pricing returning to a normal level post recovery from the pandemic.
Revenue from sales of accessories climbed 11.3% year over year.
Total operating expenses of this China-based company came in at RMB 217.3 million compared with RMB 218 million in the year-ago quarter. Selling, general and administrative expenses increased 16% on the back of the rise in compensation and benefits.
Gross margin rate improved to 25.4% from 22.8% in the year-ago period. As of Jun 30, 2022, ZTO Express repurchased 36.07 million ADSs at an average purchase price of $25.21.
Liquidity
ZTO Express exited the second quarter of 2022 with cash and cash equivalents of RMB9.93 billion compared with RMB9.90 billion at the end of March 2022.
View Intact
ZTO Express has reinstated its expectation for parcel volumes in 2022 to 24.96-25.86 billion. The guided range represents an increase of 12-16% year over year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, ZTO Express Cayman Inc. has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise ZTO Express Cayman Inc. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.