ZOETIS INC (ZTS) Stock Fundamental Analysis
NYSE:ZTS - New York Stock Exchange, Inc. - US98978V1035 - Common Stock - Currency: USD
Taking everything into account, ZTS scores 7 out of 10 in our fundamental rating. ZTS was compared to 194 industry peers in the Pharmaceuticals industry. ZTS has an excellent profitability rating, but there are some minor concerns on its financial health. ZTS has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ZTS was profitable.
In the past year ZTS had a positive cash flow from operations.
ZTS had positive earnings in each of the past 5 years.
In the past 5 years ZTS always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of ZTS (17.86%) is better than 97.94% of its industry peers.
With an excellent Return On Equity value of 54.09%, ZTS belongs to the best of the industry, outperforming 97.94% of the companies in the same industry.
The Return On Invested Capital of ZTS (25.63%) is better than 97.42% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ZTS is significantly above the industry average of 14.87%.
The 3 year average ROIC (21.64%) for ZTS is below the current ROIC(25.63%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.86% | ||
| ROE | 54.09% | ||
| ROIC | 25.63% |
ROA(3y)16.01%
ROA(5y)14.94%
ROE(3y)49.01%
ROE(5y)47.06%
ROIC(3y)21.64%
ROIC(5y)19.86%
1.3 Margins
ZTS's Profit Margin of 27.12% is amongst the best of the industry. ZTS outperforms 96.39% of its industry peers.
ZTS's Profit Margin has improved in the last couple of years.
The Operating Margin of ZTS (37.11%) is better than 96.91% of its industry peers.
In the last couple of years the Operating Margin of ZTS has grown nicely.
ZTS has a better Gross Margin (70.98%) than 79.38% of its industry peers.
ZTS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 37.11% | ||
| PM (TTM) | 27.12% | ||
| GM | 70.98% |
OM growth 3Y0.39%
OM growth 5Y2.44%
PM growth 3Y0.84%
PM growth 5Y2.31%
GM growth 3Y0.03%
GM growth 5Y0.65%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ZTS is creating value.
Compared to 1 year ago, ZTS has less shares outstanding
The number of shares outstanding for ZTS has been reduced compared to 5 years ago.
The debt/assets ratio for ZTS is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 7.23 indicates that ZTS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.23, ZTS belongs to the top of the industry, outperforming 84.02% of the companies in the same industry.
The Debt to FCF ratio of ZTS is 2.88, which is a good value as it means it would take ZTS, 2.88 years of fcf income to pay off all of its debts.
ZTS has a better Debt to FCF ratio (2.88) than 91.24% of its industry peers.
A Debt/Equity ratio of 1.12 is on the high side and indicates that ZTS has dependencies on debt financing.
With a Debt to Equity ratio value of 1.12, ZTS is not doing good in the industry: 72.16% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 2.88 | ||
| Altman-Z | 7.23 |
ROIC/WACC2.58
WACC9.92%
2.3 Liquidity
ZTS has a Current Ratio of 1.74. This is a normal value and indicates that ZTS is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.74, ZTS is not doing good in the industry: 64.95% of the companies in the same industry are doing better.
A Quick Ratio of 1.04 indicates that ZTS should not have too much problems paying its short term obligations.
ZTS has a worse Quick ratio (1.04) than 73.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.74 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.69% over the past year.
Measured over the past years, ZTS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.22% on average per year.
The Revenue has been growing slightly by 6.32% in the past year.
Measured over the past years, ZTS shows a quite strong growth in Revenue. The Revenue has been growing by 8.14% on average per year.
EPS 1Y (TTM)11.69%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.25%
Revenue 1Y (TTM)6.32%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%1.37%
3.2 Future
ZTS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.50% yearly.
ZTS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.61% yearly.
EPS Next Y6.2%
EPS Next 2Y7.94%
EPS Next 3Y8.66%
EPS Next 5Y9.5%
Revenue Next Year2.47%
Revenue Next 2Y4.3%
Revenue Next 3Y4.86%
Revenue Next 5Y5.61%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
ZTS is valuated quite expensively with a Price/Earnings ratio of 25.24.
Based on the Price/Earnings ratio, ZTS is valued cheaply inside the industry as 81.96% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.35. ZTS is around the same levels.
The Price/Forward Earnings ratio is 22.03, which indicates a rather expensive current valuation of ZTS.
Based on the Price/Forward Earnings ratio, ZTS is valued a bit cheaper than 73.20% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ZTS to the average of the S&P500 Index (37.54), we can say ZTS is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.24 | ||
| Fwd PE | 22.03 |
4.2 Price Multiples
ZTS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ZTS is cheaper than 80.41% of the companies in the same industry.
ZTS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ZTS is cheaper than 79.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.66 | ||
| EV/EBITDA | 18.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ZTS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.07
PEG (5Y)2.47
EPS Next 2Y7.94%
EPS Next 3Y8.66%
5. Dividend
5.1 Amount
ZTS has a Yearly Dividend Yield of 1.33%. Purely for dividend investing, there may be better candidates out there.
ZTS's Dividend Yield is rather good when compared to the industry average which is at 4.08. ZTS pays more dividend than 90.72% of the companies in the same industry.
With a Dividend Yield of 1.33, ZTS pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
5.2 History
The dividend of ZTS is nicely growing with an annual growth rate of 21.42%!
ZTS has been paying a dividend for at least 10 years, so it has a reliable track record.
ZTS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)21.42%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
ZTS pays out 32.25% of its income as dividend. This is a sustainable payout ratio.
ZTS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP32.25%
EPS Next 2Y7.94%
EPS Next 3Y8.66%
NYSE:ZTS (7/25/2025, 3:59:00 PM)
151.96
-0.86 (-0.56%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners96.42%
Inst Owner Change-0.61%
Ins Owners0.06%
Ins Owner Change5.03%
Market Cap67.65B
Analysts80.83
Price Target200.66 (32.05%)
Short Float %2.06%
Short Ratio3.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
Yearly Dividend1.73
Dividend Growth(5Y)21.42%
DP32.25%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.4%
Min EPS beat(2)3.63%
Max EPS beat(2)5.17%
EPS beat(4)4
Avg EPS beat(4)5.06%
Min EPS beat(4)3.63%
Max EPS beat(4)7.51%
EPS beat(8)6
Avg EPS beat(8)2.6%
EPS beat(12)8
Avg EPS beat(12)2.24%
EPS beat(16)12
Avg EPS beat(16)3.55%
Revenue beat(2)1
Avg Revenue beat(2)0.05%
Min Revenue beat(2)-0.26%
Max Revenue beat(2)0.36%
Revenue beat(4)3
Avg Revenue beat(4)1.15%
Min Revenue beat(4)-0.26%
Max Revenue beat(4)3.33%
Revenue beat(8)4
Avg Revenue beat(8)0.48%
Revenue beat(12)5
Avg Revenue beat(12)-0.19%
Revenue beat(16)8
Avg Revenue beat(16)0.35%
PT rev (1m)-0.16%
PT rev (3m)-3.32%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.89%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)1.73%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.12%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)1.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.24 | ||
| Fwd PE | 22.03 | ||
| P/S | 7.29 | ||
| P/FCF | 29.66 | ||
| P/OCF | 22.97 | ||
| P/B | 14.53 | ||
| P/tB | 78.94 | ||
| EV/EBITDA | 18.52 |
EPS(TTM)6.02
EY3.96%
EPS(NY)6.9
Fwd EY4.54%
FCF(TTM)5.12
FCFY3.37%
OCF(TTM)6.61
OCFY4.35%
SpS20.86
BVpS10.46
TBVpS1.92
PEG (NY)4.07
PEG (5Y)2.47
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.86% | ||
| ROE | 54.09% | ||
| ROCE | 32.17% | ||
| ROIC | 25.63% | ||
| ROICexc | 30.53% | ||
| ROICexgc | 52.86% | ||
| OM | 37.11% | ||
| PM (TTM) | 27.12% | ||
| GM | 70.98% | ||
| FCFM | 24.56% |
ROA(3y)16.01%
ROA(5y)14.94%
ROE(3y)49.01%
ROE(5y)47.06%
ROIC(3y)21.64%
ROIC(5y)19.86%
ROICexc(3y)27.73%
ROICexc(5y)26.47%
ROICexgc(3y)50.54%
ROICexgc(5y)50.93%
ROCE(3y)27.16%
ROCE(5y)24.93%
ROICexcg growth 3Y2.53%
ROICexcg growth 5Y2.14%
ROICexc growth 3Y5.51%
ROICexc growth 5Y8.06%
OM growth 3Y0.39%
OM growth 5Y2.44%
PM growth 3Y0.84%
PM growth 5Y2.31%
GM growth 3Y0.03%
GM growth 5Y0.65%
F-Score8
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 2.88 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 135.51% | ||
| Cap/Sales | 7.15% | ||
| Interest Coverage | 12.58 | ||
| Cash Conversion | 74.82% | ||
| Profit Quality | 90.59% | ||
| Current Ratio | 1.74 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z | 7.23 |
F-Score8
WACC9.92%
ROIC/WACC2.58
Cap/Depr(3y)135.63%
Cap/Depr(5y)123.22%
Cap/Sales(3y)7.63%
Cap/Sales(5y)7.16%
Profit Quality(3y)74.77%
Profit Quality(5y)82.34%
High Growth Momentum
Growth
EPS 1Y (TTM)11.69%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.25%
EPS Next Y6.2%
EPS Next 2Y7.94%
EPS Next 3Y8.66%
EPS Next 5Y9.5%
Revenue 1Y (TTM)6.32%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%1.37%
Revenue Next Year2.47%
Revenue Next 2Y4.3%
Revenue Next 3Y4.86%
Revenue Next 5Y5.61%
EBIT growth 1Y9.64%
EBIT growth 3Y6.4%
EBIT growth 5Y10.78%
EBIT Next Year16.87%
EBIT Next 3Y10.58%
EBIT Next 5Y9.07%
FCF growth 1Y56.45%
FCF growth 3Y9.8%
FCF growth 5Y11.47%
OCF growth 1Y36.85%
OCF growth 3Y10.09%
OCF growth 5Y10.47%