One-glance verdict
Undervalued
$113.95 our estimate vs market $73.43
Wall Street consensus: $96.00 (-15.8% lower than our fair-value estimate)
36% below our estimate, below the bear case
Fundamentals snapshot
Zoetis Inc.
ZTS · NYQ · Healthcare · Drug Manufacturers - Specialty & Generic
Current price
$73.43
52-week range
$71.00 - $149.54
Market cap
$30.34B
Balance sheet
Distressed
16.20x Strong cushion
Net debt $7.58B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 0.5% last year.
- Reward Returns 64.9% on equity, ahead of 66% of its peers.
- Risk Net debt grew 53.5% over 3 years.
- Risk Insider ownership is only 0.2% (peer median: 0.7%).
What this company does
Zoetis Inc.
Zoetis makes and sells medicines, vaccines, and diagnostic tests for animals, serving both pets like dogs and cats and farm animals like cattle and poultry. Its business is considered stable because pet owners consistently spend money to keep their animals healthy, and farmers depend on its products to protect livestock that are essential for the food supply chain (the entire process of getting food from the farm to your table).
How the company got here
Zoetis began as the animal health division of the pharmaceutical giant Pfizer in 1952. For decades, it operated within Pfizer, growing by developing new medicines for both livestock and pets. A key moment was its separation from Pfizer; it was renamed Zoetis in 2012 and became a fully independent, publicly traded company in 2013. This independence allowed it to focus entirely on animal health, and it has since grown into the world's largest company in this field. Significant acquisitions, like the diagnostics company Abaxis in 2018, have been crucial to its expansion into new areas of animal care.
What it actually does
Zoetis is a global animal health company that discovers, develops, and sells a wide range of products for both pets and farm animals. Think of it as a pharmaceutical company, but for animals. Their offerings include vaccines to prevent diseases, medicines to treat illnesses like skin conditions and infections, and products to control parasites like fleas and ticks. They also sell diagnostic equipment that veterinarians use in their clinics to test for various health issues. The company's products are sold in over 100 countries to veterinarians, farmers, and pet owners.
Companion Animal Products
This is the largest part of Zoetis's business, making up well over half of its revenue. This segment focuses on medicines and healthcare products for pets like dogs, cats, and horses. Veterinarians and pet owners buy products such as vaccines, flea and tick preventatives (like Simparica Trio), and treatments for common pet ailments like skin allergies (Apoquel and Cytopoint) and pain. The growing trend of people treating pets as family members, often called the 'humanization of pets,' has made this a major growth area for the company.
Livestock Products
This segment provides a wide array of products for farm animals, including cattle, pigs, poultry, and fish, and accounts for a significant portion of the company's sales, roughly a third of its revenue. The customers are livestock producers and veterinarians who use these products to keep their animals healthy and productive. Offerings include vaccines to prevent widespread disease, anti-infectives to treat sickness, and other products that help ensure a safe and sustainable food supply. This business provides a stable, diversified source of income for Zoetis globally.
What management is betting on now
Zoetis is heavily focused on innovation, especially in high-growth areas for pets like treatments for allergies, pain, and parasites. The company is also expanding its diagnostics business, which provides veterinarians with tools for faster, in-clinic testing, creating a recurring (repeat and predictable) revenue stream from the sale of testing supplies. Another key priority is expanding in international markets, particularly in countries like China and Brazil where pet ownership and demand for livestock products are growing. Finally, management emphasizes a strategy they call the "Continuum of Care," which means developing a complete range of products to predict, prevent, detect, and treat animal diseases.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$784.00M
FY2024 Q4
$689.00M
FY2025 Q1
$438.00M
FY2025 Q2
$308.00M
FY2025 Q3
$805.00M
FY2025 Q4
$732.00M
FY2026 Q1
$291.00M
FY2026 Q2
$538.00M
Revenue
$2.47B
Net income
$691.00M
Diluted EPS
1.65
Operating cash flow
$655.00M
Free cash flow
$538.00M
Fetching…
Sources
Revenue
$2.26B
Net income
$601.00M
Diluted EPS
1.42
Operating cash flow
$401.00M
Free cash flow
$291.00M
Fetching…
Sources
Revenue
$2.39B
Net income
$603.00M
Diluted EPS
1.37
Operating cash flow
$893.00M
Free cash flow
$732.00M
Fetching…
Sources
Revenue
$2.40B
Net income
$721.00M
Diluted EPS
1.63
Operating cash flow
$938.00M
Free cash flow
$805.00M
Fetching…
Sources
Revenue
$2.46B
Net income
$718.00M
Diluted EPS
1.61
Operating cash flow
$486.00M
Free cash flow
$308.00M
Fetching…
Sources
Revenue
$2.22B
Net income
$631.00M
Diluted EPS
1.41
Operating cash flow
$587.00M
Free cash flow
$438.00M
Fetching…
Sources
Revenue
$2.32B
Net income
$581.00M
Diluted EPS
1.29
Operating cash flow
$905.00M
Free cash flow
$689.00M
Fetching…
Sources
Revenue
$2.39B
Net income
$682.00M
Diluted EPS
1.50
Operating cash flow
$951.00M
Free cash flow
$784.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $113.95 vs current price $73.43
Wall Street consensus is the average analyst price target: $96.00 (-15.8% lower than our fair-value estimate).
Our most-likely fair value is $113.95 a share — about 55.2% above today's price of $73.43, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $7.6B. Interest coverage 16.2x.
Net debt
$7.58B
Interest coverage
16.20x
Zoetis Inc.'s profit covers its interest bill about 16.2 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
ZTS
BASELINE
Zoetis Inc.
Total debt $9.26B Interest coverage 16.20x This is the baseline the peer rows are being compared against.
Total debt $53.91B Interest coverage 16.29x +1% vs ZTS Has roughly the same debt cushion as ZTS.
Total debt $1.10B Interest coverage 35.01x +116% vs ZTS Carries about 2.2x more debt cushion than ZTS.
Total debt $4.23B Interest coverage 1.15x -93% vs ZTS Carries about 14.1x less debt cushion than ZTS.
Total debt $795.65M Interest coverage 4.41x -73% vs ZTS Carries about 3.7x less debt cushion than ZTS.
Total debt $812.60M Interest coverage -0.38x -100% vs ZTS This peer has almost no interest-payment cushion compared with ZTS.
What you should know
The case for and against ZTS
3 Rewards
2 Risks
Rewards
-
Revenue grew 0.5% last year.
-
Returns 64.9% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 53.5% over 3 years.
-
Insider ownership is only 0.2% (peer median: 0.7%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
11.98x
Forward P/E
11.24x
P/B
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P/S
3.19x
EV/EBITDA
9.33x
PEG ratio
6.86x
Profitability
How much profit each dollar creates
Gross margin
71.7%
Operating margin
40.7%
Net margin
27.7%
ROE
64.9%
ROA
15.4%
Health
Liquidity and balance-sheet strength
Debt / equity
2.94x
Current ratio
3.08x
Quick ratio
1.57x
Total debt
$9.26B
Total cash
$1.68B
Growth
How the business has been compounding
Revenue TTM
$9.52B
Revenue 5Y CAGR
5.0%
EPS TTM
6.13
EPS 5Y CAGR
10.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$2.89B
Free CF TTM
$2.28B
FCF margin
24.0%
Dividend
Shareholder payout
Yield
2.9%
Payout ratio
33.6%
Last ex-div date
2026-07-20