ZTS Zoetis Inc

Zoetis is the world's largest animal health company, producing medicines, vaccines, and diagnostics for livestock and companion animals across global markets. Sector: Healthcare.

Zoetis Inc (ZTS) is an individual stock. The analysis below presents key financial metrics for the company, covering profitability, capital efficiency, valuation, margins, and growth.

Assessing the quality of returns on invested capital, ROIC is 26.52%, WACC is 8.57%, and the economic spread is 17.95%. On balance, the company is clearing their capital cost hurdle with room to spare. Supporting metrics show ROE at 61.88% and ROA at 16.73%, a combination that helps frame whether profitability strength is broad enough to hold through different market conditions. Taken together, the return profile suggests a company with credible compounding capacity if current operating execution persists.

The market currently prices the company at trailing P/E of 19.59, forward P/E of 16.81, PEG of 2.21. The gap between P/E and forward P/E is small, suggesting the valuation is not contingent on a near-term earnings step-change. The PEG ratio is consistent with a company that is reasonably valued on a growth basis — not cheap, but not obviously expensive either. At 3.03, the aggregate current ratio reflects strong balance sheet liquidity across the company. Valuation and liquidity together frame a company where the price paid today is a reasonable bet on earnings delivery — but not a margin-of-safety purchase at current levels.

Looking at margins from gross to free cash flow, gross margin sits at 71.86%, operating margin at 38.15%, and free cash flow margin at 24.12%. The gross margin here is a standout, pointing to businesses with durable unit economics and limited commodity exposure. Exceptional operating margins signal that overhead costs are well managed relative to the revenue base. The company's cash conversion is solid — a sign that operating profits are translating into real liquidity for the company. The aggregate margin picture is strong enough to suggest resilience through normal cyclical pressure.

Projected 12-month EPS growth of 16.5% adds a powerful forward signal — analyst consensus expects earnings to accelerate materially, which, if delivered, could make current multiples look increasingly modest. Turning to growth and analyst expectations, TTM revenue growth of 3.02% indicating muted but still positive top-line momentum across the company, while the estimated 12-month price change of 30.39%, where analyst targets indicate a strong re-rating opportunity from current prices. The distinction matters: revenue growth tells you what the company are doing, price targets tell you what analysts think the market will pay for it. Ultimately, the alignment between revenue momentum and analyst targets will depend on execution quality and the broader rate and sentiment environment. The estimated 12-month price change is based on analyst consensus price target estimates, sourced from publicly available data, and should not be interpreted as a reliable prediction of future performance.

Taken together, the metrics present a favorable setup — not without risk, but with enough quality and momentum to support a positive view.

The analysis above draws from quantitative data only and does not constitute personalized financial advice. Investors should conduct independent research and consider professional guidance before acting on any information presented here.