Why Chinese Express Delivery Company ZTO Shares Are Down Today
Portfolio Pulse from Lekha Gupta
Shares of ZTO Express (Cayman) Inc (NYSE:ZTO) fell approximately 6% in premarket trading following the release of their Q3 FY23 results. Despite a 1.5% Y/Y increase in revenue to $1.244 billion and an 18.1% Y/Y increase in parcel volume, the company saw declines in key areas such as KA revenue and freight forwarding services. Adjusted EBITDA and earnings per ADS improved, but the company has adjusted its outlook, stating that a 1.5ppt annual market share gain is no longer feasible due to market competition and a focus on avoiding unprofitable volume.
November 17, 2023 | 11:58 am
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ZTO Express reported mixed Q3 FY23 results with a slight revenue increase and higher parcel volume, but faced declines in KA revenue and freight forwarding services. The company's outlook adjustment on market share gain may concern investors.
The decline in ZTO's stock price is likely due to the mixed financial results and the negative outlook on market share gains. While revenue and parcel volume increased, the significant drops in KA revenue and freight forwarding services, along with the company's statement about market share gain, may have led to investor skepticism about future profitability and growth.
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