📊 ZTS Key Takeaways
Is Zoetis Inc. (ZTS) a Good Investment?
Zoetis demonstrates exceptional operational profitability with 33.5% operating margins and 26.6% net margins, coupled with strong ROE of 18.6% and robust free cash flow generation. The company maintains excellent financial health with strong liquidity and solid debt service capability, though modest 2.3% revenue growth and elevated 2.80x debt/equity ratio warrant careful monitoring.
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.
Zoetis Inc. Key Strengths (ZTS)
- Exceptional profitability with 33.5% operating margin and 26.6% net margin
- Strong free cash flow generation at 12.9% FCF margin with excellent liquidity ratios (3.15x current, 1.91x quick)
- Superior ROE of 18.6% with EPS growth of 10.1% YoY outpacing revenue growth of 2.3%
- Excellent interest coverage of 12.2x providing strong debt service capability
- 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
- Modest revenue growth of 2.3% YoY raises sustainability and competitive positioning concerns
- Elevated debt-to-equity ratio of 2.80x represents significant financial leverage
- Operating cash flow of $401M appears low relative to $15.2B asset base indicating capital intensity
- 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
- Revenue growth acceleration trajectory and organic growth drivers
- Operating margin sustainability and operating leverage trends
- Debt reduction progress and free cash flow deployment strategy
- Organic revenue growth and net income growth
- Debt levels and interest coverage
Zoetis Inc. (ZTS) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 3.15x 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 |
|---|---|---|---|
| Q1 2026 | $2.2B | $601.0M | $1.34 |
| 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 |
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
❓ Frequently Asked Questions about ZTS
What is the AI rating for ZTS?
Zoetis Inc. (ZTS) has a Combined AI Grade of A from Claude (A) and ChatGPT (A) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ZTS's key strengths?
Claude: Exceptional profitability with 33.5% operating margin and 26.6% net margin. Strong free cash flow generation at 12.9% FCF margin with excellent liquidity ratios (3.15x current, 1.91x quick). 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: Modest revenue growth of 2.3% YoY raises sustainability and competitive positioning concerns. Elevated debt-to-equity ratio of 2.80x represents significant financial leverage. 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 $2.3B.
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 $1.42.
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 grade reflects both perspectives for balanced insights.
What is ZTS's fundamental grade?
Based on our AI fundamental analysis in June 2026, Zoetis Inc. has a A grade 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 18.6% (sector avg: 15%), net margin of 26.6% (sector avg: 12%). Higher ROE suggests strong returns relative to peers.
What is ZTS's AI grade for 2026?
Our dual AI analysis gives Zoetis Inc. a combined A grade 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 $401.0M, with capital expenditures of $110.0M. FCF margin is 12.9%.
How does ZTS compare to other Healthcare stocks?
Vs Healthcare sector averages: Net margin 26.6% (avg: 12%), ROE 18.6% (avg: 15%), current ratio 3.15 (avg: 2).
Is Zoetis Inc. carrying too much debt?
ZTS has a debt-to-equity ratio of 2.80x, which is above the Healthcare sector average of 0.6x. However, the current ratio of 3.15 suggests adequate short-term liquidity.