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ZTO Express (ZTO) Benefits From Parcel Volumes, Expenses Ail
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ZTO Express(ZTO - Free Report) is benefiting from strength across its core express delivery services unit. ZTO’s shareholder-friendly initiatives also look encouraging. Notably, shares of ZTO Express have gained 6.8% in the past year compared with a 0.7% rise of the industry it belongs to.
Image Source: Zacks Investment Research
How is ZTO Express Doing?
ZTO Express is benefiting from the strong performance of the core express delivery services unit. Notably, revenues from the unit jumped 14.1% year over year in second-quarter 2023. The uptick was driven by a 23.8% increase in parcel volume and a 7.8% decrease in parcel unit price. Parcel volume market share increased to 23.4% in the reported quarter. ZTO Express continues to expect 2023 parcel volume in the range of 29.27-30.24 billion.
We are also impressed with ZTO Express’ efforts to reward its shareholders. As of Jun 30, 2023, ZTO Express purchased 38,473,231 ADSs at an average purchase price of $25.18, including repurchase commissions. The company’s board of directors has further approved changes to its existing share repurchase program, increasing the value of shares to be repurchased from $1 billion to $1.5 billion and extending the effective time by one year through Jun 30, 2024.
On the flip side,rising selling general & administrative (SG&A) expenses might push up operating expenses and affect the bottom line. Apart from other factors, increases in compensation, benefits and office expenditures are leading to higher SG&A expenses. In second-quarter 2023, SG&A expenses increased 10.4% on the back of the rise in employees' compensation and benefits.
Zacks Rank and Stocks to Consider
Currently, ZTO Express carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for R’s current-year earnings has improved 8.1% over the past 90 days. Shares of R have gained 20.5% year to date. R delivered a trailing four-quarter earnings surprise of 11.20%, on average.
Wabtec has an expected earnings growth rate of 16.87% for the current year. WAB delivered a trailing four-quarter earnings surprise of 3.42%, on average.
The Zacks Consensus Estimate for WAB’s current-year earnings has improved 4.9% over the past 90 days. Shares of WAB have gained 5.9% year to date.
SkyWest's fleet-modernization efforts are commendable.A fall in operating expenses is a tailwind for SkyWest. In second-quarter 2023, the metric dipped 2.4% to $693.8 million due to a decline in operating costs. Low operating expenses boost bottom-line results. Shares of SKYW have surged 163.6% year to date.
SKYW delivered a trailing four-quarter earnings surprise of 31.51%, on average.
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ZTO Express (ZTO) Benefits From Parcel Volumes, Expenses Ail
ZTO Express(ZTO - Free Report) is benefiting from strength across its core express delivery services unit. ZTO’s shareholder-friendly initiatives also look encouraging. Notably, shares of ZTO Express have gained 6.8% in the past year compared with a 0.7% rise of the industry it belongs to.
Image Source: Zacks Investment Research
How is ZTO Express Doing?
ZTO Express is benefiting from the strong performance of the core express delivery services unit. Notably, revenues from the unit jumped 14.1% year over year in second-quarter 2023. The uptick was driven by a 23.8% increase in parcel volume and a 7.8% decrease in parcel unit price. Parcel volume market share increased to 23.4% in the reported quarter. ZTO Express continues to expect 2023 parcel volume in the range of 29.27-30.24 billion.
We are also impressed with ZTO Express’ efforts to reward its shareholders. As of Jun 30, 2023, ZTO Express purchased 38,473,231 ADSs at an average purchase price of $25.18, including repurchase commissions. The company’s board of directors has further approved changes to its existing share repurchase program, increasing the value of shares to be repurchased from $1 billion to $1.5 billion and extending the effective time by one year through Jun 30, 2024.
On the flip side,rising selling general & administrative (SG&A) expenses might push up operating expenses and affect the bottom line. Apart from other factors, increases in compensation, benefits and office expenditures are leading to higher SG&A expenses. In second-quarter 2023, SG&A expenses increased 10.4% on the back of the rise in employees' compensation and benefits.
Zacks Rank and Stocks to Consider
Currently, ZTO Express carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Transportation sector are Ryder System, Inc. (R - Free Report) , Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) and SkyWest, Inc. (SKYW - Free Report) . Each of these companies presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for R’s current-year earnings has improved 8.1% over the past 90 days. Shares of R have gained 20.5% year to date. R delivered a trailing four-quarter earnings surprise of 11.20%, on average.
Wabtec has an expected earnings growth rate of 16.87% for the current year. WAB delivered a trailing four-quarter earnings surprise of 3.42%, on average.
The Zacks Consensus Estimate for WAB’s current-year earnings has improved 4.9% over the past 90 days. Shares of WAB have gained 5.9% year to date.
SkyWest's fleet-modernization efforts are commendable.A fall in operating expenses is a tailwind for SkyWest. In second-quarter 2023, the metric dipped 2.4% to $693.8 million due to a decline in operating costs. Low operating expenses boost bottom-line results. Shares of SKYW have surged 163.6% year to date.
SKYW delivered a trailing four-quarter earnings surprise of 31.51%, on average.