We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
We have recently updated a report on ZTO Express (Cayman) Inc. (ZTO - Free Report) .
High SG&A expenses might increase operating expenses and hurt bottom-line results of ZTO Express. Apart from other factors, increases in salaries and accrued bonuses are leading to higher SG&A expenses. Evidently, SG&A expenses increased 10.7% year over year in first-quarter 2021. Costs are likely to be high throughout 2021 due to high SG&A expenses.
We are concerned about the 16.9% decline in gross margin rate in the first quarter of 2021 from 20.9% in the year-ago period. The reduction was primarily due to 12.4% decline in average selling prices as a result of intense competition.
Additionally, domestic express delivery market in China's e-commerce segment is highly competitive due to the presence of big players like SF Express and STO Express. The company’s stock price may take a further beating if competition intensifies and becomes a hindrance.
Meanwhile, strong performance of the core express delivery services unit is encouraging. Notably, revenues from the unit increased 65.2% year over year in the first quarter, owing to 88.5% surge in parcel volumes.
Zacks Rank & Stocks to Consider
ZTO Express currently carries a Zacks Rank #5 (Strong Sell).
Long-term (three to five years) expected earnings per share growth rate for Landstar, Triton and Herc Holdings is projected at 12%, 10% and 42.9%, respectively.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Image: Bigstock
High SG&A Expenses & Low Gross Margin Hurt ZTO Express (ZTO)
We have recently updated a report on ZTO Express (Cayman) Inc. (ZTO - Free Report) .
High SG&A expenses might increase operating expenses and hurt bottom-line results of ZTO Express. Apart from other factors, increases in salaries and accrued bonuses are leading to higher SG&A expenses. Evidently, SG&A expenses increased 10.7% year over year in first-quarter 2021. Costs are likely to be high throughout 2021 due to high SG&A expenses.
We are concerned about the 16.9% decline in gross margin rate in the first quarter of 2021 from 20.9% in the year-ago period. The reduction was primarily due to 12.4% decline in average selling prices as a result of intense competition.
Additionally, domestic express delivery market in China's e-commerce segment is highly competitive due to the presence of big players like SF Express and STO Express. The company’s stock price may take a further beating if competition intensifies and becomes a hindrance.
Meanwhile, strong performance of the core express delivery services unit is encouraging. Notably, revenues from the unit increased 65.2% year over year in the first quarter, owing to 88.5% surge in parcel volumes.
Zacks Rank & Stocks to Consider
ZTO Express currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader Zacks Transportation sector include Landstar System, Inc. (LSTR - Free Report) , Triton International Limited and Herc Holdings Inc. (HRI - Free Report) . Herc Holdings and Landstar sport a Zacks Rank #1 (Strong Buy), while Triton carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term (three to five years) expected earnings per share growth rate for Landstar, Triton and Herc Holdings is projected at 12%, 10% and 42.9%, respectively.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>