ZTO Express (Cayman) Inc. American Depositary Shares each representing one Class A ordinary share. (ZTO)

FairStock Score: 71/100 — STEADY

Key Financials

Strengths

• Generates $4.2 billion in annual free cash flow (21.5% yield on market cap)
• Strong Piotroski F-Score of 9/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 14.2% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.17, providing financial flexibility
• Attractive 2.7% dividend yield providing steady income returns

Concerns

• Altman Z-Score of 1.6 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

ZTO Express (Cayman) Inc. American Depositary Shares each representing one Class A ordinary share. is a mid-cap industrials company valued at $19.5 billion. The business generates $49.1 billion in annual revenue with a 5.3% net margin and $4.2 billion in free cash flow. From a quality standpoint, ZTO shows near-perfect Piotroski F-Score of 9/9 indicating exceptional financial health and distressed Altman Z-Score of 1.6 warrants caution. On valuation, the stock is reasonably priced at 15.6x earnings, with offers a 54% margin of safety vs Graham Number of $56. Growth dynamics show revenue growing at 12.3% and profit growth of 10.2%. The 2.7% dividend yield adds an income component for patient holders. Our composite FairStock Score of 71/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $4.2 billion in annual free cash flow (21.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the industrials space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer