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Zoetis (ZTS) Stock Fundamentals, Analysis & Risk Signals

Health score, competitive moat, risk signals, and key metrics at a glance.

NYSE•Healthcare•Drug Manufacturers - Specialty & Generic
B
GoodMetricSide Score: 63/100
ProfitabilityProfit30/30
GrowthGrowth15/25
Balance SheetBalance5/25
Cash QualityCash13/20
Price & Volume
Market Cap $31.57B

Zoetis Inc. engages in the discovery, development, manufacture, and commercialization of medicines, vaccines, diagnostic products and services, biodevices, genetic tests, and precision animal health solutions for the animal health industry in the United States and internationally. The company commercializes products primarily across companion animals comprising dogs, cats, and horses; and species, including livestock, such as cattle, swine, poultry, fish, and sheep. It also offers parasiticides, vaccines, dermatology, anti-infectives, pain and sedation, other pharmaceutical, and animal health diagnostics. In addition, the company provides animal health diagnostics, 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, which include nutritionals, as well as products and services in biodevices, genetic tests, and precision animal health. It markets its products to veterinarians, livestock producers, and pet owners. The company has collaborated with Blacksmith Medicines, Inc. to discover and develop novel antibiotics for animal health. Zoetis Inc. was incorporated in 2012 and is headquartered in Parsippany, New Jersey.

Moat Signals

Competitive analysis based on 52 quarters of fundamental data

Pricing Power

Strong Moat

Operating margins are stable at ~36.6%, suggesting durable pricing power and cost discipline.

Competitive Advantage

Strong Moat

Consistently high ROE averaging 57.9% suggests a durable competitive advantage and efficient capital allocation.

Cash Generation

Moderate Moat

8 of the last 8 quarters generated positive FCF. The company generally funds itself but has occasional cash consumption quarters.

Demand Durability

Strong Moat

TTM revenue has grown consistently (7 of 7 quarters up), with ~6.7% growth over the period. Strong demand durability.

Risk Signals

Data-driven red flags and warnings across 52 quarters

Low Risk

Margin Pressure

Healthy

Margins are stable or improving at ~36.8% — no sign of cost or pricing stress.

Earnings Quality

Watch

FCF/Net Income has dropped below 0.7x in 4 quarters — monitor for earnings quality deterioration.

Leverage Risk

Watch

D/E ratio of 2.8 is elevated and rising. Monitor for further debt accumulation.

Revenue Decline

Healthy

Revenue is stable or growing over recent quarters — demand appears durable.

Cash Burn

Healthy

Free cash flow is consistently positive — the business self-funds without external capital reliance.

Share Dilution

Healthy

Shares decreased 7.3% — net buybacks are reducing shares outstanding and boosting per-share value.

Metrics at a Glance

as of March 2026

Revenue & Profit

Revenue, EBITDA, operating income, net income, EPS, and shares

TTM Revenue
$9.51B
2.4%
Q. Revenue
$2.26B
TTM EBITDA
$3.99B
2.8%
TTM Op. Income
$3.50B
3.3%
Q. Op. Income
$800.00M
TTM Net Income
$2.64B
5.0%
Q. Net Income
$601.00M
EPS
$1.42
Shares Out.
$422.10M
5.7%
$9.51B in TTM revenue grew 2.4% YoY, reaching $2.26B last quarter. TTM EBITDA of $3.99B and TTM operating income of $3.50B shows growth is flowing through. Net income of $2.64B TTM confirms the company is converting revenue into profit. Revenue is growing modestly — monitor for acceleration or deceleration.

Margins

Gross, EBITDA, operating, and net margin trends

Gross Margin
71.7%
0.4%
EBITDA Margin
40.6%
Op. Margin
35.4%
7.2%
Net Margin
26.6%
6.5%
Op. margin of 35.4% is down 2.7% YoY — costs are rising relative to revenue. Net margin at 26.6% and gross margin of 71.7% — earnings take a bigger bite when COGS stays lean..

Price Ratios

P/E, P/S, P/B, EV/EBITDA, FCF yield, and earnings yield

P/E Ratio
11.9x
P/S Ratio
3.3x
P/B Ratio
9.8x
At 11.9x P/E, the stock trades below market averages — potentially undervalued. P/S of 3.3x and P/B of 9.8x provide additional context. Assess whether the current multiple is justified by the company's growth and profitability trajectory.

Assets & Liabilities

Total assets, cash, debt, book value, and leverage

Total Assets
$15.15B
Cash
$1.94B
Long-Term Debt
$9.04B
Book Value
$3.23B
D/E Ratio
2.8
Debt/EBITDA
9.8
With $15.15B in assets and $9.04B in long-term debt, the D/E of 2.8and book value of $3.23B — indicates elevated leverage — the company has significant financial risk and may struggle in a downturn.

Cash Flow

Operating cash flow, free cash flow, FCF margin, and earnings quality

Op. Cash Flow
$401.00M
Free Cash Flow
$291.00M
33.6%
FCF Margin
3.1%
FCF / Net Income
0.5
FCF of $291.00M on $401.00M in operating cash flow. The FCF / Net Income ratio of 0.1x indicates partial cash conversion — earnings quality needs attention.

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