Zoetis logged a -1.0% change during today's afternoon session, and is now trading at a price of $174.8 per share.
Zoetis returned gains of 20.0% last year, with its stock price reaching a high of $194.99 and a low of $140.76. Over the same period, the stock outperformed the S&P 500 index by 5.0%. More recently, the company's 50-day average price was $172.07. Zoetis Inc. discovers, develops, manufactures, and commercializes animal health medicines, vaccines, and diagnostic products in the United States and internationally. Based in Parsippany, NJ, the large-cap Health Care company has 13,800 full time employees. Zoetis has offered a 0.8% dividend yield over the last 12 months.
Growing Revenues With Increasing Reinvestment in the Business:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $5,825 | $6,260 | $6,675 | $7,776 | $8,080 | $8,222 |
| Gross Margins | 67% | 68% | 69% | 70% | 70% | 70% |
| Operating Margins | 28.0% | 28.0% | 30.0% | 32.0% | 33.0% | 34.0% |
| Net Margins | 25.0% | 24.0% | 25.0% | 26.0% | 26.0% | 27.0% |
| Net Income (MM) | $1,428 | $1,500 | $1,638 | $2,037 | $2,114 | $2,213 |
| Net Interest Expense (MM) | $206 | $223 | $231 | $224 | $221 | $236 |
| Depreciation & Amort. (MM) | $308 | $412 | $441 | $448 | $465 | $475 |
| Earnings Per Share | $2.93 | $3.11 | $3.42 | $4.27 | $4.49 | $4.75 |
| Diluted Shares (MM) | 487 | 482 | 479 | 477 | 470 | 452 |
| Free Cash Flow (MM) | $1,452 | $1,335 | $1,673 | $1,736 | $1,326 | $1,285 |
| Capital Expenditures (MM) | $338 | $460 | $453 | $477 | $586 | $714 |
| Net Current Assets (MM) | -$4,193 | -$4,089 | -$3,225 | -$2,426 | -$3,016 | -$2,945 |
| Long Term Debt (MM) | $6,443 | $5,947 | $6,595 | $6,592 | $6,552 | $6,555 |
| Net Debt / EBITDA | 2.47 | 2.04 | 1.48 | 1.11 | 1.39 | 1.52 |
Zoetis benefits from growing revenues and increasing reinvestment in the business, strong margins with a stable trend, and wider gross margins than its peer group. The company's financial statements show positive EPS growth and healthy leverage. Furthermore, Zoetis has irregular cash flows.
Zoetis Has Elevated P/B and P/E Ratios:
Zoetis has a trailing twelve month P/E ratio of 35.0, compared to an average of 24.45 for the Health Care sector. Based on its EPS guidance of $6.04, the company has a forward P/E ratio of 28.5. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 8.4%. On this basis, the company's PEG ratio is 4.18, which suggests that it is overpriced. Furthermore, Zoetis is likely overvalued compared to the book value of its equity, since its P/B ratio of 15.82 is higher than the sector average of 4.16. The company's shares are currently trading 428.3% above their Graham number.
Zoetis Has an Average Rating of Buy:
The 10 analysts following Zoetis have set target prices ranging from $190.0 to $255.0 per share, for an average of $213.0 with a buy rating. As of April 2023, the company is trading -19.2% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Zoetis has a very low short interest because 0.7% of the company's shares are sold short. Institutions own 94.6% of the company's shares, and the insider ownership rate stands at 0.2%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $6,956,775,998.
