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ZTO Express (ZTO) Grapples With Cost Woes: Time to Dump?
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We have issued an updated research report on ZTO Express (Cayman) Inc. (ZTO - Free Report) on Aug 13. The stock has been downgraded to a Zacks Rank #5 (Strong Sell) from a Zacks Rank #3 (Hold). Going by the proven model, the Sell-rated stocks (#4 or 5) are likely to underperform the broader market over the next one to three months.
Reasons for the Downgrade
High-operating expenses have been putting pressure on the bottom line for quite some time, with second-quarter 2018 results being no exception. During the quarter, high selling, general and administrative costs led to a 32.5% rise in operating expenses to RMB 268.4 million. Increased operating expenses can also be attributed to increased salary and accrued bonus.
Furthermore, with the company making constant investments to expand portfolio, costs are likely to increase and dent the bottom line in the coming quarters.
Moreover, the company’s business suffers from stringent government regulations and strict policies of the Chinese market. Additionally, the domestic express delivery market is highly competitive due to the presence of big players like SF Express and STO Express.
The negativity revolving around the stock can be gauged from the Zacks Consensus Estimate being revised 13.6% downward in the last 30 days for current-quarter earnings. Moreover, shares of this China- based company have declined 6.1% over the past month, against the industry’s rise of 1.7%
The company’s unimpressive Momentum Score of F highlights short-term unattractiveness.
Shares of Atlas Air Worldwide, GATX and SkyWest have gained 8.3%, 18.5% and 2% in the last six months, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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ZTO Express (ZTO) Grapples With Cost Woes: Time to Dump?
We have issued an updated research report on ZTO Express (Cayman) Inc. (ZTO - Free Report) on Aug 13. The stock has been downgraded to a Zacks Rank #5 (Strong Sell) from a Zacks Rank #3 (Hold). Going by the proven model, the Sell-rated stocks (#4 or 5) are likely to underperform the broader market over the next one to three months.
Reasons for the Downgrade
High-operating expenses have been putting pressure on the bottom line for quite some time, with second-quarter 2018 results being no exception. During the quarter, high selling, general and administrative costs led to a 32.5% rise in operating expenses to RMB 268.4 million. Increased operating expenses can also be attributed to increased salary and accrued bonus.
Furthermore, with the company making constant investments to expand portfolio, costs are likely to increase and dent the bottom line in the coming quarters.
Moreover, the company’s business suffers from stringent government regulations and strict policies of the Chinese market. Additionally, the domestic express delivery market is highly competitive due to the presence of big players like SF Express and STO Express.
The negativity revolving around the stock can be gauged from the Zacks Consensus Estimate being revised 13.6% downward in the last 30 days for current-quarter earnings. Moreover, shares of this China- based company have declined 6.1% over the past month, against the industry’s rise of 1.7%
The company’s unimpressive Momentum Score of F highlights short-term unattractiveness.
Stocks to Consider
A few better-ranked stocks in the broader Transportation Sector are Atlas Air Worldwide Holdings, Inc. , GATX Corporation (GATX - Free Report) and SkyWest, Inc. (SKYW - Free Report) . While GATX carries a Zacks Rank #2 (Buy), Atlas Air Worldwide and SkyWest sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Atlas Air Worldwide, GATX and SkyWest have gained 8.3%, 18.5% and 2% in the last six months, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>