Zoetis (ZTS) AI Stock Analysis

• Market Cap: $72.38B
• Dividend Yield: 1.15%
• Average Volume (3M): 2.95M
• Price to Earnings (P/E): 29.2
• Beta (1Y): 0.66
• Revenue Growth: 6.32%
• EPS Growth: 7.23%
• Country: US
• Employees: 13,800
• Sector: Healthcare
• Sector Strength: 42
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 1.48
• Shares Outstanding: 445,208,040
• 10 Day Avg. Volume: 3,012,415
• 30 Day Avg. Volume: 2,946,959
• PEG Ratio: 10.99
• Price to Book (P/B): 15.04
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.86
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 2.10
• Enterprise Value/Gross Profit: 11.70
• Enterprise Value/Ebitda: 4.98
• 1Y Price Target: $188.38
• Price Target Upside: 15.87% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 80 Outperform
• Price Target: $185.00 ▲( 13.79% 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

Earnings Performance

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

Market Leadership

Zoetis is seen as a clear market leader in an industry with durable secular growth drivers.

Revenue Growth

Revenue estimates have been raised due to favorable foreign exchange trends and higher expectations for the Simparica Trio.

Negative Factors

Product Launch Challenges

Estimates for OA Pain products have been lowered due to a slower U.S. launch for Librela.

Product Revenue Decline

Revenue from all other product sales was down roughly 4% year-over-year, outside of the top 10 products.

Sales Decline

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. is a leading global animal health company dedicated to supporting veterinarians and livestock producers in improving the health and well-being of animals. Operating in the animal pharmaceuticals and diagnostics sectors, Zoetis provides a comprehensive portfolio of medicines, vaccines, diagnostic products, and services for both companion animals and livestock. The company's products are designed to prevent and treat diseases, enhance animal productivity, and ensure food safety.

How the Company Makes Money

Zoetis makes money primarily through the sale of its extensive range of veterinary medicines and vaccines, which constitute a significant portion of its revenue. These products cater to both livestock and companion animals, addressing various health needs and fostering better health outcomes. Key revenue streams include sales of parasiticides, vaccines, anti-infectives, and dermatology products. Zoetis also generates income from its diagnostic products and genetic tests, which are used by veterinarians to identify and manage animal health issues more effectively. The company benefits from strong partnerships with veterinary clinics, agricultural producers, and research institutions, which help drive product sales and adoption. Additionally, Zoetis invests in research and development to continually innovate and expand its product offerings, ensuring sustained revenue growth. The company's global reach and strong distribution networks further enhance its market presence and financial performance.

Zoetis Financial Statement Overview

Summary

Zoetis has demonstrated strong financial health with impressive profitability margins and solid cash flow generation. The income statement shows robust revenue growth and profitability, while the balance sheet indicates low leverage despite significant liabilities. Strong cash flow generation supports potential reinvestment and operational stability.

Income Statement

Zoetis has demonstrated strong performance in its income statement metrics. The gross profit margin is consistently high at 100% in 2024. The net profit margin in 2024 stands at 26.86%, showcasing effective cost management and profitability. Revenue growth has been robust with a 8.34% increase in 2024 from the previous year, indicating healthy business expansion. EBIT margin is also impressive at 67.53% in 2024, reflecting efficient operations.

Balance Sheet

The balance sheet highlights a solid financial structure with a debt-to-equity ratio of 0.036 in 2024, which is exceptionally low and indicates low leverage. The equity ratio is 33.50%, showing a moderate reliance on equity in the company's capital structure. However, although the return on equity (ROE) is strong at 52.11%, the company's total liabilities remain significant, which could pose risks if not managed carefully.

Cash Flow

Zoetis has a strong cash flow position, with a free cash flow growth rate of 41.79% in 2024, showcasing effective cash management and potential for reinvestment. The operating cash flow to net income ratio is 1.19, indicating strong cash generation capabilities relative to net income. The free cash flow to net income ratio of 0.92 reflects a healthy conversion of income to cash.

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

Zoetis Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 162.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZTS, the sentiment is Positive. The current price of 162.58 is above the 20-day moving average (MA) of 158.88, above the 50-day MA of 157.09, and below the 200-day MA of 171.43, indicating a neutral trend. The MACD of 2.00 indicates Negative momentum. The RSI at 56.20 is Neutral, neither overbought nor oversold. The STOCH value of 72.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZTS.

Zoetis Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZTS	80 Outperform	$72.38B	29.20	51.85%	1.15%	6.32%	7.23%
RDY	77 Outperform	$12.05B	17.91	18.36%	0.56%	13.26%	1.33%
ELAN	75 Outperform	$6.29B	16.90	6.01%	―	1.42%	―
PAHC	67 Neutral	$942.00M	29.74	11.86%	2.06%	19.12%	141.45%
HCM	58 Neutral	$2.37B	62.01	5.06%	―	-25.48%	-63.36%
VTRS	55 Neutral	$9.73B	―	-21.25%	5.65%	-6.88%	-6809.78%
Sector *	53 Neutral	$5.14B	3.03	-43.89%	2.83%	16.75%	-0.06%

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.