Zoetis (ZTS) AI Stock Analysis

• Market Cap: $70.23B
• Dividend Yield: 1.24%
• Average Volume (3M): 2.73M
• Price to Earnings (P/E): 28.8
• Beta (1Y): 0.66
• Revenue Growth: 6.32%
• EPS Growth: 7.23%
• Country: US
• Employees: 13,800
• Sector: Healthcare
• Sector Strength: 53
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 1.48
• Shares Outstanding: 446,060,900
• 10 Day Avg. Volume: 2,595,575
• 30 Day Avg. Volume: 2,727,540
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 11.98
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $197.78
• Price Target Upside: 26.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

Zoetis' strong financial performance and positive earnings call results drive its solid overall score. However, technical analysis indicates caution due to bearish trends, and valuation metrics suggest the stock might be overvalued. Continued innovation and strategic resilience against economic challenges support the company's growth prospects.

Positive Factors

Financial Performance

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

Market Position

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

Negative Factors

Consumer Demand

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

Product Sales

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 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 shows strong financial health with robust profitability margins and solid cash flow generation. The company exhibits impressive revenue growth and low leverage, but must continue managing its significant liabilities.

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
6.25B	3.07B	2.89B	2.75B	2.29B
	EBITDA
3.85B	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: Neutral
• Last Price: 155.99
• 50DMA: Negative
• 100DMA: Negative
• 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 Neutral. The current price of 155.99 is above the 20-day moving average (MA) of 151.89, below the 50-day MA of 158.26, and below the 200-day MA of 172.50, indicating a neutral trend. The MACD of -0.44 indicates Negative momentum. The RSI at 51.90 is Neutral, neither overbought nor oversold. The STOCH value of 54.47 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
RDY	77 Outperform	$11.43B	18.02	18.51%	0.60%	13.26%	1.33%
ZTS	73 Outperform	$70.23B	28.81	51.85%	1.24%	6.32%	7.23%
ELAN	70 Outperform	$4.72B	14.02	5.49%	―	1.42%	―
PAHC	62 Neutral	$771.19M	41.03	7.46%	2.52%	12.63%	30.51%
HCM	58 Neutral	$2.63B	68.72	5.06%	―	-25.48%	-63.36%
VTRS	55 Neutral	$10.06B	―	-3.24%	5.66%	-4.58%	-1269.23%
Sector *	52 Neutral	$5.23B	3.70	-41.86%	2.84%	16.58%	-0.16%

Zoetis Corporate Events

Zoetis Announces Q2 2025 Dividend Payment

On February 6, 2025, Zoetis Inc. announced a dividend of $0.500 per share for the second quarter of 2025, payable on June 3, 2025, to shareholders of record as of April 21, 2025. This financial decision reflects the company’s ongoing commitment to shareholder returns and may influence Zoetis’s market positioning as a stable investment in the animal health industry.