ZTO Express (ZTO) matched fourth-quarter earnings forecasts late Tuesday and beat on revenue, positioning ZTO Express stock to clear a buy point.
ZTO Express Earnings
Estimates: ZTO Express earnings per share should fall 4% to 24 cents as revenue vaults 27% to $794 million, according to Yahoo Finance.
Results: ZTO earnings came in at 24 cents a share on revenue of $818.5 million. Parcel volume climbed 34.7% to 2.71 billion. Revenue from express delivery services increased 29.4%, led by a 34.7% increase in parcel volume. That was partially offset by a decrease in unit price per parcel due to incentives offered in response to competition.
Outlook: ZTO seeks to increase parcel volume 15 percentage points faster than the industry average this year.
“ZTO delivered a strong fourth quarter and closed out 2018 with a 1.3 percentage point increase in market share to 16.8%,” Chairman and CEO Meisong Lai said. “We maintained our leadership position in the Chinese express delivery industry in terms of parcel volume, customer satisfaction and profit generation.”
He added: “The Chinese express delivery industry continued to demonstrate healthy growth momentum with an increase of over 10 billion parcels in 2018.”
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ZTO Express Stock Technical Analysis
Shares rose 2% late to 20.40 after closing down 0.6% at 20.01 on the stock market today. While after-hours moves don’t always translate to the regular session, ZTO Express stock is poised to break out from a cup-with-handle base with a 20.28 buy point, MarketSmith analysis shows. While the base is deep, it appears not so bad in the context of the late-2018 bear market.
ZTO Express stock has a superior IBD Composite Rating of 97. That puts it in the top 3% of all stocks and reflects in part four years of rising profits for this young IPO company. Analysts see EPS growing 21% to 82 cents for 2018, with the growth rate slowing to 17% for 2019.
The relative strength line, which tracks a stock’s performance vs. the S&P 500, has been generally trending up since October. Look for it to make new highs.
ZTO stock is more volatile than most other leading stocks.
ZTO Express Counts Alibaba As Investor
ZTO Express taps China’s growing e-commerce market. The express delivery company partners with smaller firms for first-mile/last-mile pickup and delivery services.
Its backers include Alibaba (BABA). The Chinese e-commerce giant days ago made its fourth investment in the Chinese courier sector, adding STO Express to a list that includes YTO Express and ZTO Express.
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