Zoetis (ZTS) AI Stock Analysis

• Market Cap: $73.16B
• Dividend Yield: 1.22%
• Average Volume (3M): 3.00M
• Price to Earnings (P/E): 29.5
• Beta (1Y): 0.67
• Revenue Growth: 6.32%
• EPS Growth: 7.23%
• Country: US
• Employees: 13,800
• Sector: Healthcare
• Sector Strength: 58
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 1.48
• Shares Outstanding: 445,208,040
• 10 Day Avg. Volume: 2,717,091
• 30 Day Avg. Volume: 3,001,316
• PEG Ratio: 6.34
• Price to Book (P/B): 15.60
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 51.82
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 2.00
• Enterprise Value/Gross Profit: 11.23
• Enterprise Value/Ebitda: 4.74
• 1Y Price Target: $188.38
• Price Target Upside: 14.64% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 80 Outperform
• Price Target: $185.00 ▲(12.58%Upside)

Zoetis scores highly due to its strong financial performance, robust earnings call outlook, and positive technical indicators. While the high P/E ratio suggests overvaluation concerns, the company's strategic resilience and growth in key segments support a bullish outlook. Debt levels require careful management to mitigate risk.

Positive Factors

Financial Performance

The company's adjusted operating margin was 39.9%, which was well ahead of analyst expectations of 38.4%.

Product Innovation

Zoetis has a strong pipeline and first-mover advantage in several key companion animal markets.

Negative Factors

Market Reaction

Shares traded 5% lower after the first quarter call, which is largely attributed to ongoing noise around Librela label changes and weaker than expected sales.

Product Performance

Librela US sales were slightly worse than expected, continuing a trend of disappointing results over multiple quarters.

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 through the sale of its animal health products, which are aimed at preventing and treating diseases in livestock and companion animals. The company's key revenue streams include pharmaceuticals, vaccines, diagnostics, and other product categories such as genetic tests and biodevices. Zoetis's earnings are significantly bolstered by its extensive global distribution network, strategic partnerships with veterinary clinics, livestock producers, and other stakeholders in the animal health ecosystem. The company also invests in research and development to innovate new solutions and maintain its competitive edge in the industry.

Zoetis Financial Statement Overview

Summary

Zoetis demonstrates strong financial performance with impressive revenue and profit margins, robust cash flow management, and effective equity utilization. However, high leverage due to debt levels warrants caution.

Income Statement

Zoetis demonstrates strong revenue growth with a 12.1% increase from 2022 to 2023 and a further 8.3% from 2023 to 2024. The company's gross profit margin remains robust at approximately 70% TTM, and net profit margins are consistent above 25%. The EBIT margin has been stable, contributing positively to profitability. These indicators highlight the company's effective cost management and strong market position.

Balance Sheet

The balance sheet reflects a manageable debt-to-equity ratio of 1.45 TTM and a solid equity ratio of 33%. ROE is impressive at 54% TTM, indicating effective use of equity. However, high total debt relative to equity could pose a risk if market conditions worsen. Overall, the balance sheet is stable but with caution warranted due to leverage.

Cash Flow

Zoetis shows strong cash flow management with a positive free cash flow growth of 40.7% from 2022 to 2023, and a stable operating cash flow to net income ratio of 1.17 TTM. The company's ability to convert income into cash flow is strong, supporting ongoing financial health and investment capacity.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
9.29B	9.26B	8.54B	8.08B	7.78B	6.67B
	Gross Profit
6.52B	6.54B	5.83B	5.63B	5.47B	4.62B
	EBIT
3.44B	3.39B	3.07B	2.89B	2.75B	2.29B
	EBITDA
3.98B	3.87B	3.69B	3.36B	3.17B	2.69B
	Net Income Common Stockholders
2.52B	2.49B	2.34B	2.11B	2.04B	1.64B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.72B	1.99B	2.04B	3.58B	3.48B	3.60B
	Total Assets
14.10B	14.24B	14.29B	14.93B	13.90B	13.61B
	Total Debt
6.75B	6.74B	6.75B	8.09B	6.74B	7.36B
	Net Debt
5.03B	4.76B	4.72B	4.51B	3.26B	3.76B
	Total Liabilities
9.44B	9.47B	9.29B	10.52B	9.36B	9.84B
	Stockholders Equity
4.66B	4.77B	5.00B	4.41B	4.54B	3.77B
Cash Flow		Free Cash Flow
2.28B	2.30B	1.62B	1.33B	1.74B	1.67B
	Operating Cash Flow
2.94B	2.95B	2.35B	1.91B	2.21B	2.13B
	Investing Cash Flow
-359.00M	-315.00M	-777.00M	-883.00M	-458.00M	-572.00M
	Financing Cash Flow
-2.81B	-2.66B	-3.11B	-904.00M	-1.86B	123.00M

Zoetis Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 164.33
• 50DMA: Positive
• 100DMA: Positive
• 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 164.33 is below the 20-day moving average (MA) of 166.12, above the 50-day MA of 158.43, and below the 200-day MA of 170.39, indicating a neutral trend. The MACD of 2.10 indicates Positive momentum. The RSI at 49.99 is Neutral, neither overbought nor oversold. The STOCH value of 42.69 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	80 Outperform	$73.16B	29.51	51.85%	1.22%	6.32%	7.23%
RDY	77 Outperform	$13.18B	19.68	18.36%	0.61%	13.26%	1.33%
ELAN	75 Outperform	$6.86B	18.43	6.01%	―	1.42%	―
PAHC	67 Neutral	$969.97M	30.62	11.86%	2.00%	19.12%	141.45%
HCM	64 Neutral	$3.02B	78.20	5.06%	―	-25.48%	-63.36%
Sector *	54 Neutral	$5.37B	3.26	-45.10%	3.30%	16.81%	0.02%
VTRS	53 Neutral	$10.47B	―	-21.25%	5.38%	-6.88%	-6809.78%

Zoetis Corporate Events

Zoetis Elects New Board Member at Annual Meeting

On May 21, 2025, Zoetis Inc. held its Annual Meeting of Shareholders, where Dr. Mark Stetter was elected to the Board of Directors, succeeding Mr. Robert Scully who retired in accordance with the company’s director retirement policy. Dr. Stetter, with extensive experience in veterinary medicine and animal health, is expected to contribute significantly to Zoetis’ mission of advancing animal care. The meeting also saw the election of twelve directors, approval of the executive compensation program, and ratification of KPMG LLP as the independent registered public accounting firm, though a shareholder proposal for special meeting improvements was not approved.

The most recent analyst rating on (ZTS) stock is a Buy with a $230.00 price target. To see the full list of analyst forecasts on Zoetis stock, see the ZTS Stock Forecast page.

Zoetis Announces Q3 2025 Dividend of $0.50

On May 21, 2025, Zoetis announced a dividend of $0.50 per share for the third quarter of 2025, payable on September 3, 2025, to shareholders recorded by July 18, 2025. This decision reflects the company’s ongoing commitment to returning value to its shareholders and may impact its financial positioning and stakeholder relations.

The most recent analyst rating on (ZTS) stock is a Buy with a $230.00 price target. To see the full list of analyst forecasts on Zoetis stock, see the ZTS Stock Forecast page.