📊 ZTS Key Takeaways
Is Zoetis Inc. (ZTS) a Good Investment?
Zoetis demonstrates exceptional profitability with 35.5% operating margins and strong cash generation (2.3B FCF), supported by robust liquidity (3.03x current ratio). However, elevated debt levels (2.71x D/E) and modest revenue growth (2.3% YoY) with flat net income growth warrant caution on leverage management and organic growth trajectory.
Zoetis shows exceptionally strong fundamentals, with very high operating and net margins, robust free cash flow generation, and solid liquidity. The main constraint is growth quality: revenue rose only modestly and net income was flat, so the business looks more like a high-quality compounder than a rapid-growth story. Leverage is meaningful, but current interest coverage and cash generation suggest the balance sheet remains manageable.
Why Buy Zoetis Inc. Stock? ZTS Key Strengths
- Exceptional profitability: 28.2% net margin and 35.5% operating margin indicate pricing power and operational efficiency in specialty pharma
- Strong cash generation: 2.3B free cash flow with 24.1% FCF margin demonstrates sustainable earnings quality
- Robust liquidity position: 3.03x current ratio and 1.94x quick ratio provide financial flexibility
- Outstanding capital efficiency: 80.2% ROE and 17.3% ROA indicate superior returns on shareholder capital
- Solid interest coverage: 15.1x ratio demonstrates comfortable debt servicing capacity
- Excellent profitability with 35.5% operating margin and 28.2% net margin
- Strong cash generation with $2.28B of free cash flow and a 24.1% FCF margin
- Healthy liquidity and debt-servicing capacity, with 3.03x current ratio and 15.1x interest coverage
ZTS Stock Risks: Zoetis Inc. Investment Risks
- High financial leverage: 2.71x debt-to-equity and 9.0B long-term debt against 3.3B equity creates vulnerability to operational disruptions
- Stagnant growth profile: 2.3% revenue growth and 0.0% net income growth suggest limited organic expansion and competitive pressures
- Equity dilution concerns: 10.1% EPS growth despite flat net income indicates significant share buybacks masking earnings stagnation
- Debt sustainability questions: 9.0B debt on only 3.3B equity requires persistent cash flow generation; any revenue contraction poses refinancing risks
- Revenue growth of 2.3% and flat net income indicate slowing earnings momentum
- High debt load and 2.71x debt-to-equity increase balance-sheet sensitivity
- ROE of 80.2% is partly driven by low equity, which can overstate underlying economic strength
Key Metrics to Watch
- Organic revenue growth rate and segment performance trends
- Operating margin sustainability and competitive pricing dynamics
- Debt reduction progress and leverage ratio trajectory
- Free cash flow conversion and capital allocation priorities
- Operating cash flow stability and working capital efficiency
- Organic revenue growth and net income growth
- Debt levels and interest coverage
Zoetis Inc. (ZTS) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 24.1% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. Strong liquidity with a 3.03x current ratio provides a solid financial cushion.
ZTS Profit Margin, ROE & Profitability Analysis
ZTS vs Healthcare Sector: How Zoetis Inc. Compares
How Zoetis Inc. compares to Healthcare sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Zoetis Inc. Stock Overvalued? ZTS Valuation Analysis 2026
Based on fundamental analysis, Zoetis Inc. has mixed fundamental signals relative to the Healthcare sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Zoetis Inc. Balance Sheet: ZTS Debt, Cash & Liquidity
ZTS Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Zoetis Inc.'s revenue has grown significantly by 22% over the 5-year period, indicating strong business expansion. The most recent EPS of $5.07 reflects profitable operations.
ZTS Revenue Growth, EPS Growth & YoY Performance
ZTS Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $2.4B | $682.0M | $1.50 |
| Q2 2025 | $2.4B | $624.0M | $1.37 |
| Q1 2025 | $2.2B | $599.0M | $1.31 |
| Q3 2024 | $2.2B | $596.0M | $1.29 |
| Q2 2024 | $2.2B | $624.0M | $1.37 |
| Q1 2024 | $2.0B | $552.0M | $1.19 |
| Q3 2023 | $2.0B | $529.0M | $1.13 |
| Q2 2023 | $2.1B | $529.0M | $1.12 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Zoetis Inc. Dividends, Buybacks & Capital Allocation
ZTS SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Zoetis Inc. (CIK: 0001555280)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Apr 13, 2026 | 4 | xslF345X06/wk-form4_1776117764.xml | View → |
| Apr 13, 2026 | 4 | xslF345X06/wk-form4_1776117758.xml | View → |
| Apr 13, 2026 | 4 | xslF345X06/wk-form4_1776117752.xml | View → |
| Apr 13, 2026 | 4 | xslF345X06/wk-form4_1776117745.xml | View → |
| Apr 13, 2026 | 4 | xslF345X06/wk-form4_1776117740.xml | View → |
❓ Frequently Asked Questions about ZTS
What is the AI rating for ZTS?
Zoetis Inc. (ZTS) has a Combined AI Rating of BUY from Claude (BUY) and ChatGPT (BUY) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ZTS's key strengths?
Claude: Exceptional profitability: 28.2% net margin and 35.5% operating margin indicate pricing power and operational efficiency in specialty pharma. Strong cash generation: 2.3B free cash flow with 24.1% FCF margin demonstrates sustainable earnings quality. ChatGPT: Excellent profitability with 35.5% operating margin and 28.2% net margin. Strong cash generation with $2.28B of free cash flow and a 24.1% FCF margin.
What are the risks of investing in ZTS?
Claude: High financial leverage: 2.71x debt-to-equity and 9.0B long-term debt against 3.3B equity creates vulnerability to operational disruptions. Stagnant growth profile: 2.3% revenue growth and 0.0% net income growth suggest limited organic expansion and competitive pressures. ChatGPT: Revenue growth of 2.3% and flat net income indicate slowing earnings momentum. High debt load and 2.71x debt-to-equity increase balance-sheet sensitivity.
What is ZTS's revenue and growth?
Zoetis Inc. reported revenue of $9.5B.
Does ZTS pay dividends?
Zoetis Inc. does not currently pay dividends.
Where can I find ZTS SEC filings?
Official SEC filings for Zoetis Inc. (CIK: 0001555280) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ZTS's EPS?
Zoetis Inc. has a diluted EPS of $6.02.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ZTS a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Zoetis Inc. has a BUY rating with 78% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ZTS stock overvalued or undervalued?
Valuation metrics for ZTS: ROE of 80.2% (sector avg: 15%), net margin of 28.2% (sector avg: 12%). Higher ROE suggests strong returns relative to peers.
Should I buy ZTS stock in 2026?
Our dual AI analysis gives Zoetis Inc. a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is ZTS's free cash flow?
Zoetis Inc.'s operating cash flow is $2.9B, with capital expenditures of $621.0M. FCF margin is 24.1%.
How does ZTS compare to other Healthcare stocks?
Vs Healthcare sector averages: Net margin 28.2% (avg: 12%), ROE 80.2% (avg: 15%), current ratio 3.03 (avg: 2).
Is Zoetis Inc. carrying too much debt?
ZTS has a debt-to-equity ratio of 2.71x, which is above the Healthcare sector average of 0.6x. However, the current ratio of 3.03 suggests adequate short-term liquidity.
Why is ZTS's return on equity (ROE) so high?
Zoetis Inc. has a return on equity of 80.2%, significantly above the Healthcare sector average of 15%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 28.2% net margin.