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ZTO Express (ZTO) Strong on Solid Delivery Unit & Low Debt
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ZTO Express (Cayman) Inc. (ZTO - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth.
The strong performance of the core express delivery services unit is encouraging. Notably, revenues from the unit increased 15.7% year over year in the fourth quarter of 2021, owing to a 17.2% increase in parcel volumes. With the rapid growth in the e-commerce business, ZTO Express’ parcel volume has increased in recent times. ZTO Express anticipates parcel volumes in the range of 26.3-27.64 billion in 2022, indicating a rise of 18-24% year over year.
ZTO Express exited the fourth quarter with cash and cash equivalents of $1.98 billion, higher than its current debt of $570 million. This implies that the company has enough cash to pay off its short-term debt obligations.
High SG&A expenses might push up operating expenses and hurt the bottom line. Apart from other factors, increases in compensation, benefits and office expenditures are leading to higher SG&A expenses. Evidently, SG&A expenses increased 12.8% year over year in 2021.
Zacks Rank & Other Stocks to Consider
ZTO Express currently carries a Zacks Rank #2 (Buy).
Investors interested in the broader Zacks Transportation sector can also consider other top-ranked stocks like Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in the past four quarters. Expeditors is being aided by an uptick in airfreight revenues. We are optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
The long-term expected earnings per share (EPS) (three-to-five years) growth rate for Old Dominion is pegged at 16%. Old Dominion is benefiting from the strong performance of the LTL segment owing to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has rallied 34.3% in the past year. ODFL currently carries a Zacks Rank #2.
The long-term expected EPS (three-to-five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third and fourth quarter of 2020 as well as in each of the four quarters of 2021.
Driven by the positives, the stock has risen 27.4% in the past year. TRTN currently carries a Zacks Rank #2.
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ZTO Express (ZTO) Strong on Solid Delivery Unit & Low Debt
ZTO Express (Cayman) Inc. (ZTO - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth.
The strong performance of the core express delivery services unit is encouraging. Notably, revenues from the unit increased 15.7% year over year in the fourth quarter of 2021, owing to a 17.2% increase in parcel volumes. With the rapid growth in the e-commerce business, ZTO Express’ parcel volume has increased in recent times. ZTO Express anticipates parcel volumes in the range of 26.3-27.64 billion in 2022, indicating a rise of 18-24% year over year.
ZTO Express exited the fourth quarter with cash and cash equivalents of $1.98 billion, higher than its current debt of $570 million. This implies that the company has enough cash to pay off its short-term debt obligations.
High SG&A expenses might push up operating expenses and hurt the bottom line. Apart from other factors, increases in compensation, benefits and office expenditures are leading to higher SG&A expenses. Evidently, SG&A expenses increased 12.8% year over year in 2021.
Zacks Rank & Other Stocks to Consider
ZTO Express currently carries a Zacks Rank #2 (Buy).
Investors interested in the broader Zacks Transportation sector can also consider other top-ranked stocks like Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in the past four quarters. Expeditors is being aided by an uptick in airfreight revenues. We are optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
EXPD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected earnings per share (EPS) (three-to-five years) growth rate for Old Dominion is pegged at 16%. Old Dominion is benefiting from the strong performance of the LTL segment owing to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has rallied 34.3% in the past year. ODFL currently carries a Zacks Rank #2.
The long-term expected EPS (three-to-five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third and fourth quarter of 2020 as well as in each of the four quarters of 2021.
Driven by the positives, the stock has risen 27.4% in the past year. TRTN currently carries a Zacks Rank #2.