Continue Reading Below
Shares of ZTO Express(NYSE: ZTO), the Chinese package-delivery company, are down around 11% as of noon EST today after the company reported fourth-quarter and full-year 2016 earnings that, while seemingly strong, weren't quite what the market was hoping for.
For the quarter ended Dec. 31, 2016, ZTO Express grew revenue 46% year over year, to$459.5 million. Reported net income during the quarter grew 5% year over year, and adjusted net income increased a full 58%. Additionally, net cash from operations grew 5%, to nearly $160 million.
For the full year, ZTO Express' results were even more positive. Sales for the year grew 61% over 2015, with net income up 54%, or 77% adjusted for special items. Still, the company's earnings-per-share figure of $0.15 was slightly lower than what analysts expected, which seems to be why the stock is taking a turn for the worse today despite a largely positive earnings report.
Image source: Getty Images.
ZTO Express went public in October 2016 inone of the most popular IPOs of the year. As is the case in many IPOs, the company was given a relatively high valuation out of the gate, which seems to partly explain why the stock has dropped around 22% since it began trading publicly. Still, ZTO is posting some impressive growth numbers now for a stock trading at just 19 times forward earnings estimates.
Other strong points in the earnings report include higher parcel volume, which rose 44% in the fourth quarter year over year, as well as other operational wins, likemore automated sorting equipment in the company's sorting hubs. With a growing e-commerce and shipping industry in China, ZTO could be in a good place following these recent stock-price cuts, as a more reasonable valuation sets up the stock for possible market-beating growth in the years to come.
10 stocks we like better than ZTO Express (Cayman) Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and ZTO Express (Cayman) Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of February 6, 2017