# Zoetis (ZTS.US)

Canonical: https://gigainvestors.com/s/ZTS

Analysis as of: 2026-10-16T07:33:22.955Z. Financial observations: FY2009–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at a fair price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: yes.

Share price: $78.42 per share; close as of 2026-10-15.

Estimated value: low $92.46 per share, central $133.23 per share, high $155.97 per share. Buy at or below the central value $133.23 per share. Valuation as of 2026-10-16T07:33:22.955Z; scenarios are not confidence intervals.

Expected annual return: 14.8% at the stated quote. About 14.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.06×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.33×

- FY2018: 0.32×

- FY2019: 0.32×

- FY2020: 0.34×

- FY2021: 0.36×

- FY2022: 0.36×

- FY2023: 0.36×

- FY2024: 0.37×

- FY2025: 0.38×

- LTM to Jun 2026: 0.37×

### moat: pass

- ROIC, median of available years: 36.4%

- ROIC, second-lowest year: 35.1%

- Typical minus recent gross margin: -2.5 pp

- Typical gross margin (annual median): 68.0%

- Recent gross margin (lower of latest and 3-year median): 70.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 6.7%

- ROIC including acquisitions, ten-year median: 22.2%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 30.6%

- FY2018: 35.8%

- FY2019: 35.1%

- FY2020: 38.5%

- FY2021: 44.7%

- FY2022: 37.7%

- FY2023: 35.2%

- FY2024: 39.7%

- FY2025: 36.9%

- LTM to Jun 2026: 35.5%

### economics: pass

- Owner earnings / net income, 5-yr: 0.99×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $12B

- Net income, five-year total: $12B

- Return on incremental invested capital: 80.4%

- Working capital / revenue, annual change: 0.1 pp

- Working capital / revenue, change between three-year averages: -0.5 pp

- Working capital / revenue, final three-year average: 36.9%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 0.99×

- FY2023: 0.97×

- FY2024: 1.00×

- FY2025: 0.98×

- LTM to Jun 2026: 0.99×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 30.6% vs 36.9%

- Per-share earnings: 1.65 to 5.47 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.2%

- Ordinary dilution, 5-year annual growth: -1.5%

- Market cap gain: $27B

- Cumulative retained earnings: $12B

- Diluted shares, 10-year annual growth: -1.2%

- Diluted shares, 5-year annual growth: -1.5%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 16.2%

- Per-share value change: $3.82

- Per-share value, starting three-year median: $1.65

- Per-share value, ending three-year median: $5.47

- Buybacks concentrated in cheaper years (correlation): 0.85

- Average buyback yield: 1.8%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $2.4B

- Cumulative net income, 10 years: $18B

- ROIC, first three-year median: 30.6%

- ROIC, last three-year median: 36.9%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.65

- FY2017: $1.75

- FY2018: $2.93

- FY2019: $3.11

- FY2020: $3.42

- FY2021: $4.27

- FY2022: $4.49

- FY2023: $5.07

- FY2024: $5.47

- FY2025: $6.02

### accounting: pass

- restructuring or one-time charges in at least three of five years

- Sloan accruals: -1.5%

- Receivables to sales index (DSRI): 1.18×

- Restructuring years, last five: 5

- Stock compensation / operating cash flow: 2.9%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.09×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 1.13×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 1.4%

- FY2017: -5.6%

- FY2018: -3.4%

- FY2019: -2.6%

- FY2020: -3.6%

- FY2021: -1.3%

- FY2022: 1.4%

- FY2023: -0.1%

- FY2024: -3.3%

- FY2025: -1.5%

## Holders

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Ruane](https://gigainvestors.com/RC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [William Browne](https://gigainvestors.com/TB): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 68% since Dec 2021 · "Zoetis Stands by Guidance as Pet-Care Weakness and Competition Pressure Sales" (finance.yahoo.com, Sep 2026) · sales +0.5%

Story as of 2026-10-16T09:59:55.763Z; price observation 2026-10-15.

Price needs cash profits to grow 0.8% a year for ten years

- 2025-05-19: ZTS Q1 Earnings Call: Guidance Raised as Platform Products Drive Momentum Amid Competitive Pressures ([finance.yahoo.com](https://finance.yahoo.com/news/zts-q1-earnings-call-guidance-125802033.html))

- 2025-11-04: Zoetis Crumbles On Slashed 2025 Outlook As Growth Fears Mount ([finance.yahoo.com](https://finance.yahoo.com/m/9cf86a98-db6a-33da-b568-9c86a4516b91/zoetis-crumbles-on-slashed.html))

- 2026-03-17: Zoetis Cuts Guidance As Librela Safety Questions Test Growth Story ([finance.yahoo.com](https://finance.yahoo.com/news/zoetis-cuts-guidance-librela-safety-010955054.html))

- 2026-05-11: ZTS Q1 Deep Dive: Guidance Cut as Competition and Consumer Headwinds Weigh on Performance ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/zts-q1-deep-dive-guidance-231655606.html))

- 2026-06-02: Zoetis Lawsuits Challenge Companion Animal Outlook Yet Valuation Screens As Undemanding ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/zoetis-lawsuits-challenge-companion-animal-070630446.html))

- 2026-07-22: Zoetis (ZTS) Launches Two Long Acting Pet Pain Therapies In Canada And Europe ([finance.yahoo.com](https://finance.yahoo.com/healthcare/articles/zoetis-zts-launches-two-long-141331788.html))

### Sales · FY2025–2026

sales +0.5%; source https://www.sec.gov/Archives/edgar/data/1555280/000155528026000011/zts-20251231.htm; observed 2026-02-12.

- FY2017: $5.3B 

- FY2018: $5.8B 

- FY2019: $6.3B 

- FY2020: $6.7B 

- FY2021: $7.8B 

- FY2022: $8.1B 

- FY2023: $8.5B 

- FY2024: $9.3B 

- FY2025: $9.5B 

- FY2026: $9.5B 

### Gross margin · FY2026

gross margin 70.9%; source https://www.sec.gov/Archives/edgar/data/1555280/000155528026000011/zts-20251231.htm; observed 2026-02-12.

- FY2017: 64.9% 

- FY2018: 65.2% 

- FY2019: 65.7% 

- FY2020: 66.8% 

- FY2021: 68.3% 

- FY2022: 67.8% 

- FY2023: 68.3% 

- FY2024: 69.1% 

- FY2025: 70.5% 

- FY2026: 70.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in drug manufacturers specialty & generic; annual sales are USD 9.5 billion.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2025-12-31 (filed 2026-02-12); FY2025: revenue 9467000000; grossProfit 6673000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ZTS.US: 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.

### Why customers stay

Margins ranged from 68.3% to 70.5% during 2023–25; it earns 36.4% on its capital.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2023-12-31 (filed 2026-02-12); FY2023: grossProfit / revenue = 68.3%.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2024-12-31 (filed 2026-02-12); FY2024: grossProfit / revenue = 69.1%.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2025-12-31 (filed 2026-02-12); FY2025: grossProfit / revenue = 70.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); 10-year return on capital observations [[2017,0.3062892223738063],[2018,0.3584209131855515],[2019,0.3505178156730214],[2020,0.38464560973031897],[2021,0.4473877579974664],[2022,0.37705553256447694],[2023,0.35174020166779124],[2024,0.3971109844177305],[2025,0.369469588674721],[2026,0.3545885173962466]]; median 0.3639452509301363. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 68% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1555280/000155528026000011/zts-20251231.htm (filed 2026-02-12); Gross margin observations: [[2021,0.6831275720164609],[2022,0.6777227722772278],[2023,0.6828183520599251]]; range within 2 percentage points.

### Where the cash goes

Reinvests 4.2% of cash earnings; earns 80.4% on new investment.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2016-12-31 (filed 2026-02-12); FY2016: growth capex 0; upkeep 216000000; cash acquisitions 88000000; owner earnings 845000000. Growth capex plus acquisitions / owner earnings = 0.10414201183431952.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2017-12-31 (filed 2026-02-12); FY2017: growth capex 0; upkeep 224000000; cash acquisitions 0; owner earnings 882000000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2018-12-31 (filed 2026-02-12); FY2018: growth capex 30000000; upkeep 308000000; cash acquisitions 1884000000; owner earnings 1428000000. Growth capex plus acquisitions / owner earnings = 1.3403361344537814.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2019-12-31 (filed 2026-02-12); FY2019: growth capex 48000000; upkeep 412000000; cash acquisitions 0; owner earnings 1500000000. Growth capex plus acquisitions / owner earnings = 0.032.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2020-12-31 (filed 2026-02-12); FY2020: growth capex 12000000; upkeep 441000000; cash acquisitions 0; owner earnings 1638000000. Growth capex plus acquisitions / owner earnings = 0.007326007326007326.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2021-12-31 (filed 2026-02-12); FY2021: growth capex 29000000; upkeep 448000000; owner earnings 2037000000. Growth capex / owner earnings = 0.014236622484045164.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2022-12-31 (filed 2026-02-12); FY2022: growth capex 102513433.69646794; upkeep 483486566.30353206; cash acquisitions 312000000; owner earnings 2095513433.6964679. Growth capex plus acquisitions / owner earnings = 0.1978099624803024.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2023-12-31 (filed 2026-02-12); FY2023: growth capex 167351853.9021598; upkeep 564648146.0978402; cash acquisitions 59000000; owner earnings 2270351853.9021597. Growth capex plus acquisitions / owner earnings = 0.09969901956523537.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2024-12-31 (filed 2026-02-12); FY2024: growth capex 158000000; upkeep 497000000; cash acquisitions 0; owner earnings 2486000000. Growth capex plus acquisitions / owner earnings = 0.06355591311343524.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2025-12-31 (filed 2026-02-12); FY2025: growth capex 80765569.30517244; upkeep 540234430.6948276; cash acquisitions 28000000; owner earnings 2619765569.3051724. Growth capex plus acquisitions / owner earnings = 0.04151729092844739.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Incremental return on capital 0.8042367860089663, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Dividend observations: [[2016,188000000],[2017,206000000],[2018,243000000],[2019,314000000],[2020,380000000],[2021,474000000],[2022,611000000],[2023,692000000],[2024,786000000],[2025,889000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/api/fundamentals/ZTS.US.json#2025-12-31 (filed 2026-02-12); FY2025: cash repurchases 3235000000 USD.

### Are managers owners

Insiders own 0.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ZTS.US SharesStats.PercentInsiders = 0.164 percentage points; cache date 2026-10-16.

### What could break it

"Our results of operations are dependent upon the success of our top-selling products." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1555280/000155528026000011/zts-20251231.htm (filed 2026-02-12); Our results of operations are dependent upon the success of our top-selling products.

### What the price says

The price assumes cash profits grow 0.8% yearly over ten years; actual growth was 32.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Ten-year compound average after fade. Initial solved rate -0.014645993061814959. Price 78.42; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.3505843404333302 → FY2025 5.902566425147121. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $47.80 per share

- 2016-11: $50.38 per share

- 2016-12: $53.53 per share

- 2017-01: $54.94 per share

- 2017-02: $53.31 per share

- 2017-03: $53.37 per share

- 2017-04: $56.11 per share

- 2017-05: $62.28 per share

- 2017-06: $62.38 per share

- 2017-07: $62.52 per share

- 2017-08: $62.70 per share

- 2017-09: $63.76 per share

- 2017-10: $63.82 per share

- 2017-11: $72.29 per share

- 2017-12: $72.04 per share

- 2018-01: $76.73 per share

- 2018-02: $80.86 per share

- 2018-03: $83.51 per share

- 2018-04: $83.48 per share

- 2018-05: $83.70 per share

- 2018-06: $85.19 per share

- 2018-07: $86.48 per share

- 2018-08: $90.60 per share

- 2018-09: $91.56 per share

- 2018-10: $90.15 per share

- 2018-11: $93.87 per share

- 2018-12: $85.54 per share

- 2019-01: $86.16 per share

- 2019-02: $94.23 per share

- 2019-03: $100.67 per share

- 2019-04: $101.84 per share

- 2019-05: $101.05 per share

- 2019-06: $113.49 per share

- 2019-07: $114.89 per share

- 2019-08: $126.42 per share

- 2019-09: $124.59 per share

- 2019-10: $127.92 per share

- 2019-11: $120.52 per share

- 2019-12: $132.35 per share

- 2020-01: $134.21 per share

- 2020-02: $133.23 per share

- 2020-03: $117.69 per share

- 2020-04: $129.31 per share

- 2020-05: $139.39 per share

- 2020-06: $137.04 per share

- 2020-07: $151.68 per share

- 2020-08: $160.10 per share

- 2020-09: $165.37 per share

- 2020-10: $158.55 per share

- 2020-11: $160.38 per share

- 2020-12: $165.50 per share

- 2021-01: $154.25 per share

- 2021-02: $155.24 per share

- 2021-03: $157.48 per share

- 2021-04: $173.03 per share

- 2021-05: $176.68 per share

- 2021-06: $186.36 per share

- 2021-07: $202.70 per share

- 2021-08: $204.56 per share

- 2021-09: $194.14 per share

- 2021-10: $216.20 per share

- 2021-11: $222.04 per share

- 2021-12: $244.03 per share

- 2022-01: $199.79 per share

- 2022-02: $193.65 per share

- 2022-03: $188.59 per share

- 2022-04: $177.25 per share

- 2022-05: $170.93 per share

- 2022-06: $171.89 per share

- 2022-07: $182.55 per share

- 2022-08: $156.53 per share

- 2022-09: $148.29 per share

- 2022-10: $150.78 per share

- 2022-11: $154.14 per share

- 2022-12: $146.55 per share

- 2023-01: $165.49 per share

- 2023-02: $167.00 per share

- 2023-03: $166.44 per share

- 2023-04: $175.78 per share

- 2023-05: $163.01 per share

- 2023-06: $172.21 per share

- 2023-07: $188.09 per share

- 2023-08: $190.51 per share

- 2023-09: $173.98 per share

- 2023-10: $157.00 per share

- 2023-11: $176.67 per share

- 2023-12: $197.37 per share

- 2024-01: $187.81 per share

- 2024-02: $198.33 per share

- 2024-03: $169.21 per share

- 2024-04: $159.24 per share

- 2024-05: $169.56 per share

- 2024-06: $173.36 per share

- 2024-07: $180.04 per share

- 2024-08: $183.49 per share

- 2024-09: $195.38 per share

- 2024-10: $178.78 per share

- 2024-11: $175.25 per share

- 2024-12: $162.93 per share

- 2025-01: $170.90 per share

- 2025-02: $167.24 per share

- 2025-03: $164.65 per share

- 2025-04: $156.40 per share

- 2025-05: $168.63 per share

- 2025-06: $155.95 per share

- 2025-07: $145.79 per share

- 2025-08: $156.40 per share

- 2025-09: $146.32 per share

- 2025-10: $144.09 per share

- 2025-11: $128.18 per share

- 2025-12: $125.82 per share

- 2026-01: $124.82 per share

- 2026-02: $131.10 per share

- 2026-03: $118.21 per share

- 2026-04: $114.97 per share

- 2026-05: $77.69 per share

- 2026-06: $71.86 per share

- 2026-07: $77.29 per share

- 2026-08: $77.10 per share

- 2026-09: $69.83 per share

- 2026-10: $78.42 per share

## Annual estimated value (USD per share)

- FY2016: low $12.77 per share, central $14.35 per share, high $16.47 per share

- FY2017: low $15.58 per share, central $17.32 per share, high $19.63 per share

- FY2018: low $24.98 per share, central $27.97 per share, high $31.96 per share

- FY2019: low $34.29 per share, central $47.37 per share, high $54.99 per share

- FY2020: low $48.08 per share, central $59.46 per share, high $68.26 per share

- FY2021: low $65.04 per share, central $91.68 per share, high $106.54 per share

- FY2022: low $68.47 per share, central $96.55 per share, high $112.21 per share

- FY2023: low $73.64 per share, central $105.58 per share, high $123.39 per share

- FY2024: low $81.36 per share, central $116.88 per share, high $136.68 per share

- FY2025: low $87.08 per share, central $124.84 per share, high $145.90 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:39:08.548Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1555280/000155528026000011/zts-20251231.htm); period 2025-12-31, filed 2026-02-12.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.