Zoetis Inc.
Zoetis Inc. Fundamental Analysis
Zoetis Inc. (ZTS) shows strong financial fundamentals with a PE ratio of 20.51, profit margin of 28.23%, and ROE of 58.23%. The company generates $9.5B in annual revenue with moderate year-over-year growth of 8.33%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 61.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze ZTS's fundamental strength across five key dimensions:
Efficiency Score
ExcellentZTS demonstrates superior asset utilization.
Valuation Score
ModerateZTS shows balanced valuation metrics.
Growth Score
ModerateZTS shows steady but slowing expansion.
Financial Health Score
ModerateZTS shows balanced financial health with some risks.
Profitability Score
ExcellentZTS achieves industry-leading margins.
Key Financial Metrics
Is ZTS Expensive or Cheap?
P/E Ratio
ZTS trades at 20.51 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ZTS's PEG of 13.54 indicates potential overvaluation.
Price to Book
The market values Zoetis Inc. at 16.46 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 11.74 times EBITDA. This signals the market has high growth expectations.
How Well Does ZTS Make Money?
Net Profit Margin
For every $100 in sales, Zoetis Inc. keeps $28.23 as profit after all expenses.
Operating Margin
Core operations generate 38.00 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $58.23 in profit for every $100 of shareholder equity.
ROA
Zoetis Inc. generates $17.28 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Zoetis Inc. generates strong operating cash flow of $2.92B, reflecting robust business health.
Free Cash Flow
Zoetis Inc. generates strong free cash flow of $2.30B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.21 in free cash annually.
FCF Yield
ZTS converts 4.12% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
20.51
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
13.54
vs 25 benchmark
P/B Ratio
Price to book value ratio
16.46
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.83
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.85
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.03
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.58
vs 25 benchmark
ROA
Return on assets percentage
0.17
vs 25 benchmark
ROCE
Return on capital employed
0.27
vs 25 benchmark
How ZTS Stacks Against Its Sector Peers
| Metric | ZTS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 20.51 | 29.28 | Better (Cheaper) |
| ROE | 58.23% | 820.00% | Weak |
| Net Margin | 28.23% | -19743.00% (disorted) | Strong |
| Debt/Equity | 2.85 | 0.26 | Weak (High Leverage) |
| Current Ratio | 3.03 | 4.69 | Strong Liquidity |
| ROA | 17.28% | -17807.00% (disorted) | Strong |
ZTS outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Zoetis Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
55.65%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
74.46%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
73.18%
Industry Style: Defensive, Growth, Innovation
High Growth