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ZTO Express Cayman Inc. (ZTO) Up 14.4% Since Last Earnings Report: Can It Continue?
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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 14.4% 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.
Earnings Miss at ZTO Express in Q1
ZTO Express' earnings of 12 cents per share (RMB 0.82) missed the Zacks Consensus Estimate of 27 cents. Moreover, the bottom line declined significantly year over year. Results were affected by coronavirus-related woes despite a 4.9% increase in parcel volume to 2,374 million.
Total revenues of $553 million (RMB 3.92 billion) also declined year over year. The downside was due to decline in revenues at the express delivery services unit, which contributed 88.7% to the top line.
Detailed Operational Statistics
Revenues in Express delivery services declined 16.1% year over year, affected by coronavirus headwinds. Freight forwarding services revenues, contributing 6.3% to the top line, inched up 2.1% year over year, owing to increase in cross-border e-commerce demand amid coronavirus concerns. However, revenues from sales of accessories declined 15.2% year over year.
Meanwhile, total operating expenses declined 10.6% to RMB 446.6 million. Selling, general and administrative expenses increased marginally year over year. Gross margin deteriorated to 20.9% in the first quarter from 27.5% in the year-ago quarter. As of Mar 31, 2020, ZTO Express repurchased 7.7 million ADSs at average price of $17.33.
Liquidity
ZTO Express exited the first quarter with cash and cash equivalents of RMB 5.02 billion, compared with RMB 5.27 billion at the end of 2019.
Outlook
ZTO Express expects parcel volumes in the range of 15.9-16.4 billion for 2020. This indicates a 37-42% increase for the combined last three quarters of the year. Additionally, adjusted net income is anticipated between RMB 5.39 billion and RMB 5.83 billion, indicating a 10-20% rise for the combined last three quarters of the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 11.11% due to these changes.
VGM Scores
At this time, ZTO Express Cayman Inc. has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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. Notably, ZTO Express Cayman Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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ZTO Express Cayman Inc. (ZTO) Up 14.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for ZTO Express Cayman Inc. (ZTO - Free Report) . Shares have added about 14.4% 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.
Earnings Miss at ZTO Express in Q1
ZTO Express' earnings of 12 cents per share (RMB 0.82) missed the Zacks Consensus Estimate of 27 cents. Moreover, the bottom line declined significantly year over year. Results were affected by coronavirus-related woes despite a 4.9% increase in parcel volume to 2,374 million.
Total revenues of $553 million (RMB 3.92 billion) also declined year over year. The downside was due to decline in revenues at the express delivery services unit, which contributed 88.7% to the top line.
Detailed Operational Statistics
Revenues in Express delivery services declined 16.1% year over year, affected by coronavirus headwinds. Freight forwarding services revenues, contributing 6.3% to the top line, inched up 2.1% year over year, owing to increase in cross-border e-commerce demand amid coronavirus concerns. However, revenues from sales of accessories declined 15.2% year over year.
Meanwhile, total operating expenses declined 10.6% to RMB 446.6 million. Selling, general and administrative expenses increased marginally year over year. Gross margin deteriorated to 20.9% in the first quarter from 27.5% in the year-ago quarter. As of Mar 31, 2020, ZTO Express repurchased 7.7 million ADSs at average price of $17.33.
Liquidity
ZTO Express exited the first quarter with cash and cash equivalents of RMB 5.02 billion, compared with RMB 5.27 billion at the end of 2019.
Outlook
ZTO Express expects parcel volumes in the range of 15.9-16.4 billion for 2020. This indicates a 37-42% increase for the combined last three quarters of the year. Additionally, adjusted net income is anticipated between RMB 5.39 billion and RMB 5.83 billion, indicating a 10-20% rise for the combined last three quarters of the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 11.11% due to these changes.
VGM Scores
At this time, ZTO Express Cayman Inc. has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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. Notably, ZTO Express Cayman Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.