Zoetis (ZTS) AI Stock Analysis

• Market Cap: $55.01B
• Dividend Yield: 1.69%
• Average Volume (3M): 4.19M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 0.56
• Revenue Growth: 2.68%
• EPS Growth: 11.51%
• Country: US
• Employees: 13,800
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 1.70
• Shares Outstanding: 440,693,200
• 10 Day Avg. Volume: 4,445,768
• 30 Day Avg. Volume: 4,190,174
• PEG Ratio: 3.88
• Price to Book (P/B): 15.51
• Price to Sales (P/S): 8.00
• P/FCF Ratio: 32.20
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 6.41
• Enterprise Value/Gross Profit: 9.07
• Enterprise Value/Ebitda: 14.86
• 1Y Price Target: $148.20
• Price Target Upside: 18.73% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $137.00 ▲(9.76% Upside)

Zoetis' strong financial performance and strategic initiatives, such as share repurchases and dividend increases, are key strengths. However, technical indicators suggest a bearish trend, and challenges in certain market segments pose risks. Overall, the stock is well-positioned for growth, but investors should be mindful of market pressures.

Positive Factors

Revenue Growth

Consistent revenue growth reflects strong demand for Zoetis' products, enhancing its market position and supporting long-term financial stability.

Cash Flow Generation

Robust cash flow generation allows Zoetis to reinvest in R&D, support strategic initiatives, and return value to shareholders, ensuring sustainable growth.

Product Innovation

New product approvals like Portela enhance Zoetis' competitive edge and expand its portfolio, driving future revenue and market share growth.

Negative Factors

U.S. Market Pressure

Stagnation in the U.S. Companion Animal segment due to declining vet visits could limit growth and affect overall revenue performance.

Competitive Dynamics

Increased competition in dermatology could pressure margins and market share, challenging Zoetis' ability to maintain its leadership position.

OA Pain Franchise Decline

Decline in OA pain franchise sales due to competition and misperceptions may hinder revenue growth and require strategic adjustments.

Zoetis Business Overview & Revenue Model

Company Description

Zoetis Inc. discovers, develops, manufactures, and commercializes animal health medicines, vaccines, and diagnostic products in the United States and internationally. It commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep; and companion animals comprising dogs, cats, and horses. The company also offers vaccines, which are biological preparations to prevent diseases of the respiratory, gastrointestinal, and reproductive tracts or induce a specific immune response; anti-infectives that prevent, kill, or slow the growth of bacteria, fungi, or protozoa; and parasiticides that prevent or eliminate external and internal parasites, which include fleas, ticks, and worms. It also provides other pharmaceutical products that comprise pain and sedation, antiemetic, reproductive, and oncology products; dermatology products for itch associated with allergic conditions and atopic dermatitis; and medicated feed additives, which offer medicines to livestock. In addition, the company provides portable blood and urine analysis testing, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services, and blood glucose monitors; and other non-pharmaceutical products, including nutritionals and agribusiness services, as well as products and services in areas, such as biodevices, genetics tests, and precision animal health. It markets its products to veterinarians, livestock producers, and retail outlets, as well as third-party veterinary distributors through its sales representatives, and technical and veterinary operations specialists. The company was founded in 1952 and is headquartered in Parsippany, New Jersey.

How the Company Makes Money

Zoetis generates revenue primarily through the sale of its animal health products, which include pharmaceuticals, vaccines, and diagnostic services. The company's revenue model is built on a diverse portfolio of products that cater to various animal species and health needs. Key revenue streams include sales from its Livestock and Companion Animal segments, with livestock products often contributing a substantial portion of revenue due to the scale of agricultural production. Additionally, Zoetis has established significant partnerships with veterinary clinics, animal health distributors, and livestock producers, which enhance its market reach and sales capabilities. The company also invests in research and development to innovate and expand its product offerings, further driving revenue growth through new product launches and market penetration.

Zoetis Financial Statement Overview

Summary

Zoetis exhibits strong financial health with robust revenue growth, high profitability margins, and improved leverage ratios. The company's ability to generate cash flow is commendable, supporting its operational and strategic initiatives. However, there is room for improvement in asset financing through equity.

Income Statement

Zoetis has demonstrated strong revenue growth with a TTM (Trailing-Twelve-Months) growth rate of 12.8%, indicating robust demand for its products. The company maintains healthy margins, with a gross profit margin of 70.6% and a net profit margin of 28.2% in the TTM period. EBIT and EBITDA margins are also strong at 37.9% and 43.1%, respectively, reflecting efficient operations and cost management.

Balance Sheet

Zoetis has improved its financial stability with a significant reduction in its debt-to-equity ratio to 0.038 in the TTM period, indicating a strong equity position relative to its debt. The return on equity is impressive at 53.6%, showcasing effective use of shareholder funds. However, the equity ratio stands at 35.6%, suggesting room for improvement in asset financing through equity.

Cash Flow

The company exhibits strong cash flow performance with a remarkable free cash flow growth rate of 94.6% in the TTM period. The operating cash flow to net income ratio is 1.61, indicating efficient cash generation relative to net income. The free cash flow to net income ratio of 76.8% further highlights the company's ability to convert earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.40B	9.26B	8.54B	8.08B	7.78B	6.67B
Gross Profit	6.64B	6.40B	5.83B	5.48B	5.31B	4.46B
EBITDA	4.05B	3.87B	3.69B	3.36B	3.17B	2.69B
Net Income	2.65B	2.49B	2.34B	2.11B	2.04B	1.64B
Balance Sheet
Total Assets	15.16B	14.24B	14.29B	14.93B	13.90B	13.61B
Cash, Cash Equivalents and Short-Term Investments	2.08B	1.99B	2.04B	3.58B	3.48B	3.60B
Total Debt	7.27B	6.74B	6.75B	8.09B	6.74B	7.36B
Total Liabilities	9.76B	9.47B	9.29B	10.52B	9.36B	9.84B
Stockholders Equity	5.40B	4.77B	5.00B	4.41B	4.54B	3.77B
Cash Flow
Free Cash Flow	2.24B	2.30B	1.62B	1.33B	1.74B	1.67B
Operating Cash Flow	2.92B	2.95B	2.35B	1.91B	2.21B	2.13B
Investing Cash Flow	-456.00M	-315.00M	-777.00M	-883.00M	-458.00M	-572.00M
Financing Cash Flow	-2.12B	-2.66B	-3.11B	-904.00M	-1.86B	123.00M

Zoetis Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 124.82
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZTS, the sentiment is Neutral. The current price of 124.82 is below the 20-day moving average (MA) of 124.91, above the 50-day MA of 123.06, and below the 200-day MA of 143.00, indicating a neutral trend. The MACD of -0.25 indicates Positive momentum. The RSI at 51.79 is Neutral, neither overbought nor oversold. The STOCH value of 29.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ZTS.

Zoetis Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZTS	74 Outperform	$55.01B	20.51	49.87%	1.69%	2.68%	11.51%
RDY	70 Outperform	$11.09B	17.04	―	0.64%	10.63%	6.35%
ELAN	69 Neutral	$11.96B	330.32	0.54%	―	3.08%	-82.39%
PAHC	64 Neutral	$1.63B	23.98	23.79%	1.28%	33.71%	289.48%
VTRS	60 Neutral	$15.08B	-4.23	-21.09%	3.99%	-6.40%	-320.23%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Zoetis Corporate Events

Zoetis Announces Convertible Notes Offering and Share Repurchases

On December 15, 2025, Zoetis announced a proposed private offering of $1.75 billion in convertible senior notes due 2029, with an option for initial purchasers to buy an additional $250 million, targeted exclusively at qualified institutional buyers under Rule 144A. The company plans to use substantially all of the net proceeds to fund capped call transactions and to repurchase its common stock under its existing $6 billion share repurchase program, with buybacks expected to continue through no later than the first quarter of 2026. The capped call structure is designed to mitigate dilution from potential note conversions and manage any excess cash payments, while related hedging and concurrent share repurchases may affect the trading price of Zoetis’ common stock and the notes, underscoring the transaction’s role as both a financing and capital-return mechanism for shareholders.

The most recent analyst rating on (ZTS) stock is a Buy with a $160.00 price target. To see the full list of analyst forecasts on Zoetis stock, see the ZTS Stock Forecast page.

Zoetis Announces 6% Increase in Quarterly Dividend

On December 11, 2025, Zoetis announced a 6% increase in its quarterly dividend, declaring a dividend of $0.53 per share for the first quarter of 2026. This decision reflects the company’s commitment to delivering value to its shareholders and underscores its strong financial position in the animal health industry.

The most recent analyst rating on (ZTS) stock is a Buy with a $140.00 price target. To see the full list of analyst forecasts on Zoetis stock, see the ZTS Stock Forecast page.

Zoetis Hosts Innovation Webcast on Animal Health

Zoetis Inc. announced an Innovation Webcast scheduled for December 2, 2025, to discuss the future of animal health. The webcast will highlight the company’s strategic focus on innovation, market opportunities, and the growing demand for advanced therapies in the animal health sector. The event aims to showcase Zoetis’s leadership in the industry, driven by its robust R&D capabilities and market reach, as well as its commitment to sustainable growth through prevention technologies and next-generation solutions.

The most recent analyst rating on (ZTS) stock is a Buy with a $165.00 price target. To see the full list of analyst forecasts on Zoetis stock, see the ZTS Stock Forecast page.

Zoetis Appoints Stephanie Tilenius to Board of Directors

Zoetis Inc. announced the appointment of Stephanie Tilenius to its Board of Directors, effective December 1, 2025, increasing the board size from 12 to 13 members. Tilenius, a seasoned entrepreneur with extensive experience in digital health and AI, is expected to contribute significantly to Zoetis’ digital transformation and innovation strategy in the animal health industry, aligning with the company’s vision to leverage technology for improved animal care.

The most recent analyst rating on (ZTS) stock is a Buy with a $166.00 price target. To see the full list of analyst forecasts on Zoetis stock, see the ZTS Stock Forecast page.