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Investors in ZTO Express (Cayman) Inc. (NYSE:ZTO) had a good week, as its shares rose 3.8% to close at US$20.14 following the release of its annual results. ZTO Express (Cayman) beat revenue expectations by 2.9%, at CN¥44b. Statutory earnings per share (EPS) came in at CN¥10.70, some 4.6% short of analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from ZTO Express (Cayman)'s 23 analysts is for revenues of CN¥51.1b in 2025. This would reflect a solid 15% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 15% to CN¥12.74. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥47.5b and earnings per share (EPS) of CN¥12.80 in 2025. There doesn't appear to have been a major change in sentiment following the results, other than the slight bump in revenue estimates.
See our latest analysis for ZTO Express (Cayman)
Even though revenue forecasts increased, there was no change to the consensus price target of US$26.42, suggesting the analysts are focused on earnings as the driver of value creation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on ZTO Express (Cayman), with the most bullish analyst valuing it at US$32.51 and the most bearish at US$19.50 per share. This is a very narrow spread of estimates, implying either that ZTO Express (Cayman) is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 15% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.4% annually. So it's pretty clear that ZTO Express (Cayman) is forecast to grow substantially faster than its industry.