Zoetis (ZTS)

Health Care · $33.4B market cap · SEC CIK 0001555280

Next reports on Feb 10, 2027, after the close, with analysts expecting $1.24 in earnings per share.

52-week range $68.77 to $132.49. 38% below its 52-week high and 20% above its low.

The case for ZTS

• 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.
• Reasonably priced for its growth: 12.8× earnings, where 7% a year of growth plus a 1.6% dividend would justify about 21×.
• Gross margin of 72% absorbs cost shocks.
• Moves less than the market (beta 0.65).

The case against

• Down 31.5% over the past year.
• Heavily leveraged. Debt is 2.9× equity.
• 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. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.

• Each factor except momentum is half fixed thresholds, half rank among the 59 Health Care companies.

The financials

The financials, five years deep

Pulled from Zoetis's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.

What Zoetis says it does

Overview Zoetis Inc. is a global leader in the animal health industry, focused on the discovery, development, manufacture and commercialization of medicines, vaccines, diagnostic products and services, biodevices, genetic tests and precision animal health. We have a diversified business, commercializing products across eight core species: dogs, cats and horses (collectively, companion animals) and cattle, swine, poultry, fish and sheep (collectively, livestock); and within seven major product categories: parasiticides, vaccines, dermatology, anti-infectives, pain and sedation, other pharmaceutical and animal health diagnostics. With a legacy of nearly 75 years, we continue to pioneer ways to predict, prevent, detect, and treat animal illness, supporting those raising and caring for animals worldwide - from veterinarians and pet owners to livestock producers. We were incorporated in Delaware in July 2012 and prior to that the company…

Risk factors ZTS lists in its 10-K

• United States Food and Drug Administration (FDA)
• United States Department of Agriculture (USDA)
• Environmental Protection Agency (EPA)
• Joint FAO/WHO Expert Committee on Food Additives (JECFA)
• International Cooperation on Harmonisation of Technical Requirements for Registration of Veterinary Medicinal Products (VICH)
• Workplace Culture and Employee Engagement
• Talent Recruitment, Development and Retention
• Information about our Executive Officers
• Chief Executive Officer and Director
• Executive Vice President and Chief Financial Officer
• Executive Vice President and President, Global Manufacturing and Supply
• Executive Vice President and Chief Commercial Officer
• Executive Vice President and Head of Global Strategy, Commercial and Business Development, and Global BioDevices
• Executive Vice President and President, Research and Development
• Executive Vice President, Corporate Affairs and Chief Sustainability Officer
• Executive Vice President, Chief Human Resources Officer and Global Operations
• Executive Vice President, General Counsel and Corporate Secretary
• Executive Vice President and Chief Digital & Technology Officer
• s and laws, impacts of the timing and processing of sales in the International segment, possible impacts of the expected fiscal year alignment
• f our subsidiaries operating outside the U.S., foreign exchange rates, growth in emerging markets, the outcome of contingencies, such as legal proceedings, plans related to share repurchases an
• The animal health industry is highly competitive
• Our products are subject to unanticipated safety, quality or efficacy concerns
• Our business is subject to risk based on global economic and political conditions
• Generic and other products may be viewed as more cost-effective than our products
• Consolidation of our customers and distributors could negatively affect the pricing of our products
• Changes in distribution channels for companion animal products could negatively impact our market share, margins and distribution of our products
• An outbreak of infectious disease carried by animals could negatively affect the sale and production of our products
• Disruptive innovations and advances in medical practices and technologies could negatively affect the market for our products
• Implementing new business lines or offering new products and services may subject us to additional risks
• Restrictions and bans on the use of and/or consumer preferences regarding antibacterials in food-producing animals may become more prevalent
• Perceived adverse effects linked to the consumption of food derived from animals that utilize our products or animals generally could cause a decline in the sales of such products
• Increased regulation or decreased governmental financial support relating to the raising, processing or consumption of food-producing animals could reduce demand for our livestock products
• We may not successfully acquire and integrate other businesses, license rights to technologies or products, form and manage alliances or divest businesses
• Changes in trade policies, including the imposition of tariffs, sanctions, and other trade restrictions, may adversely affect our business
• Our business may be negatively affected by weather conditions, natural disasters and the availability of natural resources
• Climate change could have a material adverse impact on our and our customers’ businesses
• Our business is subject to risk based on customer exposure to rising costs and reduced customer income
• Our business may be harmed if we are unable to retain and hire executive officers or other key personnel
• Our business could be adversely affected by labor disputes, strikes or work stoppages
• We may be required to write down goodwill or identifiable intangible assets
• Manufacturing problems and capacity imbalances may cause product launch delays, inventory shortages, recalls or unanticipated costs
• We rely on third parties to provide us with products, materials and services, and are subject to increased labor and material costs and potential disruptions in supply
• There may be delays and additional costs due to changes to our existing manufacturing facilities and the construction of new manufacturing plants
• Our R&D, acquisition and licensing efforts may fail to generate new products and product lifecycle innovations
• We may experience difficulties or delays in the development and commercialization of new products
• Our R&D relies on evaluations in animals, which may become subject to bans or additional restrictive regulations
• Our business is subject to substantial regulation
• We may incur substantial costs and receive adverse outcomes in litigation and/or other legal matters
• The illegal distribution and sale by third parties of counterfeit or illegally compounded versions of our products or of stolen, diverted or relabeled products could have a negative impact on our reputation and business
• The misuse or off-label use of our products may harm our reputation or result in financial or other damages
• Our operations and reputation may be impacted if we do not comply with complex and continually evolving laws and regulations regarding data privacy information and the use of AI
• Our aspirations, goals and disclosures related to sustainability matters expose us to numerous risks, including risks to our reputation
• We depend on sophisticated information technology and infrastructure
• We may be unable to successfully manage our online ordering sites
• We use machine learning and AI in various business operations, and inability to successfully monitor and manage its use could result in operational, competitive or reputational harm, regulatory enforcement, and legal liability
• Foreign exchange rate fluctuations and potential currency controls affect our results of operations, as reported in our financial statements
• The Company could be subject to changes in its tax rates, the adoption of new U.S. or foreign tax legislation or exposure to additional tax liabilities
• The alleged intellectual property rights of third parties may negatively affect our business
• If our intellectual property rights are challenged or circumvented, competitors may be able to take advantage of our research and development efforts
• We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
• We may not have the funds necessary to finance the change of control offer required by the indenture governing our senior notes
• The conditional conversion feature of our convertible senior notes, if triggered, may adversely affect our financial condition and operating results
• Conversion of our convertible senior notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock
• Pfizer's rights as licensor under the patent and know-how license could limit our ability to develop and commercialize certain products
• We are dependent on Pfizer to prosecute, maintain and enforce certain intellectual property

Filings

Other Health Care companies