Zoetis (ZTS) AI Stock Analysis

Compare

3,626 Followers

Top Page

Zoetis

(NYSE:ZTS)

Rating:76Outperform

Price Target:

$180.00

▲(14.61%Upside)

Zoetis' strong financial performance and positive earnings call guidance are the key drivers of the score, reflecting robust growth and strategic resilience. Technical indicators suggest caution, but the company's commitment to shareholder returns and moderate valuation provide a balanced outlook.

Positive Factors

Financial Performance

Zoetis reported solid first quarter results with organic operational growth at 9%, exceeding expectations.

Product Adoption

The company is making progress in the adoption of Librela by increasing education efforts across vet and owner channels.

Negative Factors

Consumer Demand

Management commentary highlighted that some premium products are experiencing small but notable consumer headwinds.

Product Performance

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

Zoetis (ZTS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$69.92B

Dividend Yield1.26%

Average Volume (3M)2.79M

Price to Earnings (P/E)28.2

Beta (1Y)0.64

Revenue Growth6.32%

EPS Growth7.23%

CountryUS

Employees13,800

SectorHealthcare

Sector Strength39

IndustryDrug Manufacturers - Specialty & Generic

Share Statistics

EPS (TTM)1.48

Shares Outstanding445,208,040

10 Day Avg. Volume2,958,269

30 Day Avg. Volume2,789,980

Financial Highlights & Ratios

PEG Ratio6.34

Price to Book (P/B)15.60

Price to Sales (P/S)0.00

P/FCF Ratio51.82

Enterprise Value/Market Cap1.05

Enterprise Value/Revenue2.00

Enterprise Value/Gross Profit11.23

Enterprise Value/Ebitda4.74

Forecast

1Y Price Target

$187.75

Price Target Upside19.55% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

Zoetis Business Overview & Revenue Model

Company DescriptionZoetis Inc. is a global leader in the animal health industry, dedicated to providing veterinarians and livestock producers with a broad range of products and services. Operating primarily in the pharmaceutical and biotechnology sectors, Zoetis develops, manufactures, and markets vaccines, medicines, diagnostic products, genetic tests, biodevices, and a variety of other offerings tailored to improve the health and productivity of animals. The company's comprehensive portfolio addresses the diverse needs of both companion animals and livestock across more than 100 countries.

How the Company Makes MoneyZoetis generates revenue through the sale of its extensive range of animal health products. The company's revenue model primarily revolves around two main segments: companion animal and livestock. The companion animal segment focuses on products for pets, including vaccines, parasiticides, and dermatology products, which are sold directly to veterinarians, clinics, and pet owners. The livestock segment caters to livestock producers, providing vaccines, anti-infectives, and performance-enhancing products aimed at improving animal health and farm productivity. Zoetis also benefits from its strategic partnerships and collaborations with veterinary practices, research institutions, and agricultural businesses, enhancing its market reach and innovation capabilities. Additionally, the company invests significantly in research and development to sustain its pipeline of new products, ensuring a steady stream of innovative solutions to meet evolving market demands.

Zoetis Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas are driving growth and profitability, and indicating strategic focus and diversification.

Chart InsightsZoetis' Companion Animal segment shows strong growth momentum, with a notable surge in recent quarters, driven by the Simparica franchise and dermatology products. This aligns with the earnings call highlighting a 19% growth in Simparica and a 9% overall increase in the segment. Meanwhile, the Livestock segment faces challenges, particularly in the US, with a decline due to price competition and supply timing issues. Despite these challenges, the company maintains a positive outlook, expecting 6-8% organic revenue growth, supported by innovation and strategic investments.

Data provided by:

Main Street Data

Zoetis Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: -0.64%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive outlook for Zoetis, with strong growth in key segments and strategic resilience against macroeconomic challenges. While there are concerns around the slower adoption of Librela and tariff impacts, the overall market position remains robust with continued innovation and demand for their diverse portfolio.

Q1-2025 Updates

Positive Updates

Strong Organic Operational Revenue Growth

Zoetis achieved a 9% organic operational revenue growth in Q1 2025, driven by a balanced portfolio. The International segment led with 11% growth, while the US grew 6% excluding the impact of the MFA divestiture.

Innovative Companion Animal Portfolio Performance

The companion animal portfolio grew 9% operationally, driven by strong demand for the Simparica franchise, which posted a 19% growth, and key dermatology products which grew by 10%.

Livestock Segment Growth

The livestock segment experienced a 7% organic operational growth, driven by broad-based double-digit performance internationally.

Strong Adjusted Net Income and EPS Growth

Adjusted net income grew 6% on an organic operational basis, and adjusted diluted EPS grew 8% on the same basis, driven by robust share repurchase activities.

Resilient Market Position Amid Economic Challenges

Zoetis maintains steady demand for its products and is well-positioned to navigate tariff impacts with a 60% US manufacturing footprint and strategic global reach.

Negative Updates

Librela Adoption Slower Than Expected

Adoption of Librela has been more gradual than initially anticipated, with a noted shift in consumer spending reflecting broader economic trends.

US Livestock Decline

The US livestock segment experienced a 2% organic operational decline, impacted by aggressive price competition and timing of supply and price adjustments.

Tariff Impact Concerns

Current enacted tariffs have resulted in a $20 million headwind, primarily affecting imports related to APIs and certain diagnostic products.

Company Guidance

In the first quarter of 2025, Zoetis reported a robust 9% organic operational revenue growth, driven by a 6% increase in adjusted net income on an organic operational basis. The International segment showed impressive performance with an 11% organic operational revenue growth, while the US segment grew by 6%, excluding the impact of the MFA divestiture. The companion animal portfolio, notably the Simparica franchise, experienced a 19% growth, contributing $367 million in revenue, while the overall companion animal portfolio grew by 9% operationally. Livestock also saw a 7% organic operational growth. Zoetis maintained a full-year organic operational revenue guidance range of 6% to 8%, despite macroeconomic uncertainties. Adjusted net income for the full year is expected to grow between 5% and 7% on an organic operational basis, with adjusted diluted EPS projected to be between $6.20 and $6.30. The company continues to focus on innovation, customer engagement, and strategic investments to manage challenges and leverage opportunities in the evolving market landscape.

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

Very Positive

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

Positive

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

Very Positive

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
EBITDA	3.98B	3.87B	3.69B	3.36B	3.17B	2.69B
Net Income	2.52B	2.49B	2.34B	2.11B	2.04B	1.64B
Balance Sheet
Total Assets	14.10B	14.24B	14.29B	14.93B	13.90B	13.61B
Cash, Cash Equivalents and Short-Term Investments	1.72B	1.99B	2.04B	3.58B	3.48B	3.60B
Total Debt	6.75B	6.74B	6.75B	8.09B	6.74B	7.36B
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

Negative

Last Price157.05

Price Trends

50DMA

160.95

Negative

100DMA

160.21

Negative

200DMA

168.25

Negative

Market Momentum

MACD

-1.42

Positive

RSI

44.66

Neutral

STOCH

64.15

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZTS, the sentiment is Negative. The current price of 157.05 is below the 20-day moving average (MA) of 160.10, below the 50-day MA of 160.95, and below the 200-day MA of 168.25, indicating a bearish trend. The MACD of -1.42 indicates Positive momentum. The RSI at 44.66 is Neutral, neither overbought nor oversold. The STOCH value of 64.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZTS.

Zoetis Risk Analysis

Zoetis disclosed 47 risk factors in its most recent earnings report. Zoetis reported the most risks in the "Tech & Innovation" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Zoetis Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZTS	76 Outperform	$69.92B	28.20	51.85%	1.26%	6.32%	7.23%
RDY	72 Outperform	$12.74B	18.78	18.36%	0.64%	14.23%	-0.84%
RDY	72 Outperform	$12.74B	18.78	18.36%	0.64%	14.23%	-0.84%
ELAN	65 Neutral	$7.19B	19.31	6.01%	―	1.42%	―
ELAN	65 Neutral	$7.19B	19.31	6.01%	―	1.42%	―
Sector *	64 Neutral	¥338.68B	10.99	-2.99%	2.58%	11.79%	-10.20%
PAHC	64 Neutral	$1.21B	38.26	11.86%	1.71%	19.12%	141.45%
PAHC	64 Neutral	$1.21B	38.26	11.86%	1.71%	19.12%	141.45%
VTRS	54 Neutral	$10.80B	―	-21.25%	5.15%	-6.88%	-6809.78%
VTRS	54 Neutral	$10.80B	―	-21.25%	5.15%	-6.88%	-6809.78%
HCM	50 Neutral	$2.72B	71.36	5.06%	―	-25.48%	-63.36%
HCM	50 Neutral	$2.72B	71.36	5.06%	―	-25.48%	-63.36%

* Healthcare Sector Average

Performance Comparison

ZTS

Zoetis

157.80

-14.51

-8.42%

RDY

Dr Reddy's Laboratories

14.77

-0.69

-4.46%

RDY

Dr Reddy's Laboratories

14.77

-0.69

-4.46%

VTRS

Viatris

9.26

-1.05

-10.18%

VTRS

Viatris

9.26

-1.05

-10.18%

PAHC

Phibro Animal Health

30.12

13.34

79.50%

PAHC

Phibro Animal Health

30.12

13.34

79.50%

HCM

HUTCHMED

15.93

-0.92

-5.46%

HCM

HUTCHMED

15.93

-0.92

-5.46%

ELAN

Elanco Animal Health

14.75

1.19

8.78%

Zoetis Corporate Events

Executive/Board ChangesShareholder Meetings

Zoetis Elects New Board Member at Annual Meeting

Neutral

May 22, 2025

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.

Dividends

Zoetis Announces Q3 2025 Dividend of $0.50

Positive

May 21, 2025

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.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 05, 2025