A month has gone by since the last earnings report for ZTO Express (Cayman) Inc. (ZTO). Shares have lost about 1.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ZTO Express Cayman due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for ZTO Express (Cayman) Inc. before we dive into how investors and analysts have reacted as of late.
ZTO Q4 Earnings Up Year over Year
ZTO Express reported fourth-quarter 2025 earnings of 47 cents per share, which improved from the year-ago quarter. Total revenues of $2.07 billion surpassed the Zacks Consensus Estimate of $2.00 billion and improved year over year.
Based on current market and operating conditions, ZTO Express expects its 2026 parcel volume guidance in the range of 42.37 billion to 43.52 billion (reflecting 10-13% year over year growth).
Detailed Operational Statistics
Revenue from the core express delivery business increased 12.4% year over year, owing to a 9.2% growth in parcel volume and a 2.9% increase in parcel unit price. Key account revenues, generated by direct sales organizations, grew 71.5% year over year owing to increase in e-commerce return parcels.
Revenues from freight forwarding services improved 8.1% year over year. Revenues from sales of accessories, largely consisted of sales of thermal paper for digital waybills, rose 1.6% year over year. Other revenues were derived mainly from financing services.
Gross profit decreased 2.1% from the year-ago reported quarter. Gross margin rate fell to 25.4% from 29.1% in the year-ago period.
Total operating expenses were RMB492.5 million ($70.4 million), compared with RMB306.5 million in the same period last year.
ZTO Express exited the fourth quarter of 2025 with cash and cash equivalents of $1.43 billion compared with $1.31 billion at the end of the prior quarter.
ZTO’s board has approved its share repurchase program in November 2018 and made subsequent modifications, whereby the latest modification increased the aggregate value of shares that may be repurchased to $2.0 billion and extended the effective period through June 30, 2026.
As of Dec 31, 2025, ZTO had repurchased an aggregate of 59,839,819 ADSs for $1.39 billion on the open market, including commissions. By Feb 28, 2026, taking into account the concurrent share repurchase, ZTO's total repurchases reached 85,467,295 Class A ordinary shares (including those in the form of ADSs). The $2.0 billion existing share repurchase program is substantially completed.
On Mar 17, 2026, ZTO’s board approved a new share repurchase program, authorizing the repurchase of up to $1.5 billion of its shares over the next 24 months, effective from March 20, 2026, through March 20, 2028.
Since March 2024, ZTO has maintained a semi-annual dividend policy with a payout ratio of no less than 40% of its prior year adjusted net income. Starting from 2026, ZTO aims to deliver an aggregate annual shareholder return ratio of no less than 50% of its adjusted net income for the prior fiscal year (which is inclusive of both cash dividends and share repurchases).
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, ZTO Express Cayman has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
ZTO Express Cayman has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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ZTO Express (Cayman) Inc. (ZTO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).