Zoetis (ZTS)
Health Care · $29.5B market cap · SEC CIK 0001555280
fundamentals score out of 100
Next reports on Nov 2, 2026, before the open, with analysts expecting $1.52 in earnings per share.
The case for ZTS
- Cheap on earnings at 11.3×, well under the market's usual 20×.
- Generated $2.3B of free cash flow in FY2025, 24% of revenue.
- Earns 69% on shareholder equity.
- 27% of revenue drops through to net profit.
- Free cash flow of 7.7% of its market value a year: a lot of cash for the price.
- Gross margin of 72% absorbs cost shocks.
The case against
- Down 51.1% over the past year.
- Heavily leveraged. Debt is 2.9× equity.
- Near the bottom of its 52-week range, 51% below the high. Falling prices usually have a reason; find it first.
- Revenue grew only 1.4%, roughly the pace of inflation.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Health Care companies (momentum is judged against fixed thresholds only), and the five are blended by weight. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 76 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 39 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 88 |
| Momentumhow the price has behaved lately | 13 |
| Stabilityhow violently it moves, what it owes and what it pays you | 53 |
- Each factor except momentum is half fixed thresholds, half rank among the 59 Health Care companies.
Key numbers
| Price / earnings | 11.3× |
|---|---|
| Price / book | 9.57× |
| Price / sales | 3.1× |
| Revenue growth (YoY) | +1.4% |
| EPS growth (YoY) | +4.6% |
| Gross margin | 72% |
| Operating margin | 34% |
| Net margin | 27% |
| Return on equity | 69% |
| Debt / equity | 2.87× |
| Current ratio | 3.08 |
| Dividend yield | 1.64% |
| Beta | 0.69 |
| 52-week range | $70.26 – $148.79 |
| Position in that range | 3% of the way up |
| 3-month return | -9.4% |
| 1-year return | -51.1% |
Five years of financials, as filed
Pulled from Zoetis's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $9.5B | $9.3B | $8.5B | $8.1B | $7.8B |
| Net income | $2.7B | $2.5B | $2.3B | $2.1B | $2.0B |
| Operating cash flow | $2.9B | $3.0B | $2.4B | $1.9B | $2.2B |
| Capital expenditure | $621M | $655M | $732M | $586M | $477M |
| Total assets | $15.5B | $14.2B | $14.3B | $14.9B | $13.9B |
| Total liabilities | $12.1B | $9.5B | $9.3B | $10.5B | $9.4B |
| Shareholder equity | $3.4B | $4.8B | $5.0B | $4.4B | $4.5B |
| Cash | $2.5B | $2.0B | $2.0B | $3.6B | $3.5B |
| Long-term debt | $9.0B | $5.2B | $6.6B | $6.6B | $6.6B |
| Free cash flow | $2.3B | $2.3B | $1.6B | $1.3B | $1.7B |
| Net margin | 28.2% | 26.9% | 27.4% | 26.2% | 26.2% |
| Diluted shares | 444M | 455M | 462M | 470M | 477M |
Share count is down 6.9% over 4 years. Buybacks have been shrinking the pie.
What Zoetis says it does
– Intellectual Property . Manufacturing and supply In order to sell our products, we must be able to produce and ship our products in sufficient quantities. Many of our products involve complex manufacturing processes and are sole-sourced from certain manufacturing sites. Minor deviations in our manufacturing or logistical processes, such as temperature excursions or improper package sealing, could result in delays, inventory shortages, unanticipated costs, product recalls, product liability and/or regulatory action. In addition, a number of factors could cause production interruptions that could result in launch delays, inventory shortages, recalls, unanticipated costs or issues with our supply agreements with third parties. Our manufacturing network may be unable to meet the demand for our products or we may have excess capacity if demand for our products changes. The unpredictability of a product's regulatory or commercial success…
Risk factors ZTS lists in its 10-K
- Perceptions of product quality, safety and reliability
- Changing distribution channels for companion animal products
- Weather conditions, climate change and the availability of natural resources
- Lead through innovation across our diverse portfolio -
- Deliver an exceptional experience to delight our customers -
- Power our business through digital solutions and data insights -
- Support a workplace where our colleagues can thrive
- Advance sustainability in animal health for a better future -
- Perform with excellence and agility -
- Components of revenue and costs and expenses
- Selling, general and administrative (SG&A)
- Restructuring charges and certain acquisition and divestiture-related costs
- Significant accounting policies and application of critical accounting estimates
- Note 3. Significant Accounting Policies