Zoetis (ZTS) AI Stock Analysis

• Market Cap: $55.34B
• Dividend Yield: 1.69%
• Average Volume (3M): 4.46M
• Price to Earnings (P/E): 21.8
• Beta (1Y): 0.52
• 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): 1.48
• Shares Outstanding: 422,127,720
• 10 Day Avg. Volume: 4,461,047
• 30 Day Avg. Volume: 4,463,556
• PEG Ratio: 2.04
• Price to Book (P/B): 16.75
• Price to Sales (P/S): 5.89
• P/FCF Ratio: 24.44
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 6.86
• Enterprise Value/Gross Profit: 9.73
• Enterprise Value/Ebitda: 15.89
• 1Y Price Target: $147.70
• Price Target Upside: 12.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 6.97
• Revenue Forecast (FY): $9.92B

• Rating: 75 Outperform
• Price Target: $145.00 ▲(10.60% Upside)
• Action: Reiterated Date: 02/13/26
• Date: Action: Reiterated 02/13/26

The score is driven primarily by strong, durable financial performance (growth, margins, and cash flow) and a generally positive but cautious earnings outlook. Technicals are improving but still constrained by the longer-term downtrend versus the 200-day average, while valuation is only moderately attractive given the P/E and modest yield.

Positive Factors

Revenue Growth & Margin Durability

Steady top-line expansion paired with consistently high gross and operating margins indicates durable pricing power across products and species. This structural profitability supports reinvestment in R&D and commercial channels, sustaining long-term earnings and resilience to cyclical demand swings.

Strong Cash Generation

Robust and growing operating cash flow and high free-cash-flow conversion provide durable funding for R&D, M&A optionality, and capital returns. Reliable FCF at scale reduces dependence on external financing and enables sustained strategic investment even through near-term revenue variability.

Material Deleveraging & Capital Returns Capacity

Sharp reduction in reported debt materially improves financial flexibility and lowers interest exposure, enabling persistent capital returns without sacrificing investment. Deleveraging, combined with sustained buybacks/dividends, signals disciplined capital allocation and supports long-term shareholder value creation.

Negative Factors

OA Pain (mAb) Franchise Weakness

Material and persistent declines in the OA monoclonal antibody portfolio reduce growth in the Companion Animal segment and undermine a previously meaningful revenue stream. Prolonged weakness may require increased marketing, pricing incentives, or R&D pivots, pressuring margins and long-term revenue growth.

Heightened Competitive & Promotional Intensity

Sustained promotional activity and new product entrants in dermatology and parasiticides can erode pricing power and force higher SG&A spending. If competitive intensity persists, it will pressure margins and require sustained commercial investment, reducing the durability of recent margin expansion.

U.S. Clinic Traffic & Pet-Owner Price Sensitivity

Structural declines in clinic visits and heightened price sensitivity among key demographics can reduce demand for routine and elective treatments over multiple quarters. Lower visit frequency compresses volume growth opportunities for recurring products, making revenue less resilient and increasing reliance on pricing or new launches.

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

Strong fundamentals supported by steady revenue growth (2020–2024), consistently high margins, and solid free cash flow generation. Balance sheet trends improved with sharply lower reported debt in the latest annual data, though prior years show moderate-to-elevated leverage and 2025 profitability line-item gaps reduce near-term visibility.

Income Statement

Revenue has expanded steadily from $6.7B (2020) to $9.3B (2024) with continued growth in 2024 (+8.3%) and strong profitability throughout. Margins are consistently high (2024 gross margin ~69%, operating margin ~36%, net margin ~27%), supporting durable earnings power and pricing strength. Net income also trends upward ($1.6B in 2020 to $2.5B in 2024). A key limitation is that 2025 annual margin details appear missing/zeroed in places (gross profit/EBIT/EBITDA), which reduces visibility into the latest year’s operating trajectory despite net income rising to $2.7B.

Balance Sheet

Leverage improved meaningfully: total debt declined from $6.7B (2024) to $0.2B (2025 annual), while equity stands at $3.3B in 2025. In prior years, leverage was moderate-to-elevated (debt-to-equity ~1.35–1.95 from 2020–2024), but returns on equity were very strong (roughly ~43%–52% from 2020–2024), indicating efficient profitability. The main weakness is the historical reliance on debt (especially 2020–2022) and the notable drop in equity from $4.8B (2024) to $3.3B (2025), which bears watching even as reported debt falls sharply.

Cash Flow

Cash generation is solid and scaling: operating cash flow increased from $2.1B (2020) to ~$3.0B (2024), with free cash flow reaching ~$2.3B (2024–2025 annual). Free cash flow growth is strong overall, including a rebound after a 2022 decline and continued expansion into 2024–2025. Cash conversion is generally healthy, with free cash flow running at ~69%–78% of net income (2021–2024). A softer point is that in some years operating cash flow did not fully cover reported earnings (notably 2022 and 2024), suggesting some working-capital or timing effects that can pressure cash conversion intermittently.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.47B	9.26B	8.54B	8.08B	7.78B
Gross Profit	6.67B	6.40B	5.83B	5.48B	5.31B
EBITDA	4.07B	3.87B	3.69B	3.36B	3.17B
Net Income	2.67B	2.49B	2.34B	2.11B	2.04B
Balance Sheet
Total Assets	15.47B	14.24B	14.29B	14.93B	13.90B
Cash, Cash Equivalents and Short-Term Investments	2.31B	1.99B	2.04B	3.58B	3.48B
Total Debt	9.49B	6.74B	6.75B	8.09B	6.74B
Total Liabilities	12.14B	9.47B	9.29B	10.52B	9.36B
Stockholders Equity	3.33B	4.77B	5.00B	4.41B	4.54B
Cash Flow
Free Cash Flow	2.28B	2.30B	1.62B	1.33B	1.74B
Operating Cash Flow	2.90B	2.95B	2.35B	1.91B	2.21B
Investing Cash Flow	-748.00M	-315.00M	-777.00M	-883.00M	-458.00M
Financing Cash Flow	-1.87B	-2.66B	-3.11B	-904.00M	-1.86B

Zoetis Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 131.10
• 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 131.1 is above the 20-day moving average (MA) of 127.22, above the 50-day MA of 125.60, and below the 200-day MA of 140.65, indicating a neutral trend. The MACD of 1.23 indicates Negative momentum. The RSI at 60.53 is Neutral, neither overbought nor oversold. The STOCH value of 78.60 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	75 Outperform	$55.34B	21.77	65.99%	1.69%	2.68%	11.51%
PAHC	74 Outperform	$2.22B	24.20	31.80%	1.28%	33.71%	289.48%
RDY	70 Outperform	$11.79B	18.45	―	0.64%	10.63%	6.35%
ELAN	64 Neutral	$13.13B	-56.60	-3.67%	―	3.08%	-82.39%
VTRS	56 Neutral	$17.19B	-5.04	-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 Board Declares Second-Quarter 2026 Cash Dividend

On February 5, 2026, Zoetis Inc.’s board of directors declared a second-quarter 2026 dividend of $0.53 per share, to be paid on June 2, 2026, to shareholders of record as of April 20, 2026, underscoring the company’s ongoing practice of returning cash to investors. The decision reflects Zoetis’s financial capacity to sustain shareholder distributions and may reinforce its appeal to income-focused investors within the animal health sector.

The most recent analyst rating on (ZTS) stock is a Hold with a $135.00 price target. To see the full list of analyst forecasts on Zoetis stock, see the ZTS Stock Forecast page.

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.