Announcing: ZTO Express (Cayman) (NYSE:ZTO) Stock Increased An Energizing 144% In The Last Three Years

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For instance the ZTO Express (Cayman) Inc. (NYSE:ZTO) share price is 144% higher than it was three years ago. Most would be happy with that. And in the last month, the share price has gained 6.9%.

See our latest analysis for ZTO Express (Cayman)

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

ZTO Express (Cayman) was able to grow its EPS at 23% per year over three years, sending the share price higher. This EPS growth is lower than the 35% average annual increase in the share price. This indicates that the market is feeling more optimistic on the stock, after the last few years of progress. It's not unusual to see the market 're-rate' a stock, after a few years of growth.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that ZTO Express (Cayman) has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for ZTO Express (Cayman) the TSR over the last 3 years was 153%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We're pleased to report that ZTO Express (Cayman) rewarded shareholders with a total shareholder return of 57% over the last year. That's including the dividend. So this year's TSR was actually better than the three-year TSR (annualized) of 36%. Given the track record of solid returns over varying time frames, it might be worth putting ZTO Express (Cayman) on your watchlist. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with ZTO Express (Cayman) (including 1 which is concerning) .

But note: ZTO Express (Cayman) may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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