Analyzing BEST (NYSE:BEST) & ZTO Express (Cayman) (NYSE:ZTO)

BEST (NYSE:BEST) and ZTO Express (Cayman) (NYSE:ZTO) are both transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Profitability

This table compares BEST and ZTO Express (Cayman)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BEST -1.35% -10.65% -3.40%
ZTO Express (Cayman) 24.23% 13.28% 11.51%

Analyst Recommendations

This is a summary of current ratings and price targets for BEST and ZTO Express (Cayman), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BEST 0 1 1 0 2.50
ZTO Express (Cayman) 0 0 2 0 3.00

BEST currently has a consensus price target of $6.50, indicating a potential upside of 32.38%. ZTO Express (Cayman) has a consensus price target of $23.00, indicating a potential upside of 20.67%. Given BEST’s higher possible upside, equities analysts clearly believe BEST is more favorable than ZTO Express (Cayman).

Volatility and Risk

BEST has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, ZTO Express (Cayman) has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Earnings & Valuation

This table compares BEST and ZTO Express (Cayman)’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BEST $4.07 billion 0.45 -$73.88 million ($0.21) -23.38
ZTO Express (Cayman) $2.56 billion 3.78 $637.48 million $0.77 24.75

ZTO Express (Cayman) has lower revenue, but higher earnings than BEST. BEST is trading at a lower price-to-earnings ratio than ZTO Express (Cayman), indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

18.9% of BEST shares are held by institutional investors. Comparatively, 39.0% of ZTO Express (Cayman) shares are held by institutional investors. 41.7% of BEST shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

ZTO Express (Cayman) beats BEST on 10 of the 14 factors compared between the two stocks.

BEST Company Profile

BEST Inc. operates as a smart supply chain service provider in the People's Republic of China. Its proprietary technology platform enables its ecosystem participants to operate their businesses through various SaaS-based applications. The company applies its technologies to a range of applications, such as network and route optimization, swap bodies, sorting line automation, smart warehouses, and store management. It offers integrated services and solutions across the supply chain, including warehouse management, order fulfillment, express delivery, freight, and other services for multinational and corporate customers, as well as small and medium enterprises. The company also provides express delivery services; and door-to-door integrated cross-border supply chain services to and from China, including international express, less-than-truckload, fulfillment, reverse logistics, and freight forwarding through its network, and transportation and warehouse partners. In addition, it operates real-time bidding platform to source truckload capacity from independent transportation service providers and agents; and offers online merchandise sourcing and store management services for convenience stores, as well as B2C services, such as parcel pick-up and drop-off, and bill payment services. Further, BEST Inc. provides various value-added services, including customized financial services, including fleet and equipment finance leases; and centralized sourcing of products and services, such as bulk procurement of trucks and accessories. The company was founded in 2007 and is headquartered in Hangzhou, the People's Republic of China.

ZTO Express (Cayman) Company Profile

ZTO Express (Cayman) Inc. provides express delivery and other value-added logistics services in the People's Republic of China. The company offers delivery services for e-commerce and traditional merchants, and other express service users. As of December 31, 2017, it operated a fleet of approximately 3,600 self-owned trucks. ZTO Express (Cayman) Inc. was founded in 2009 and is headquartered in Shanghai, the People's Republic of China.

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