Stock of the Day

February 18, 2020

Zoetis (ZTS)

$160.39
+$2.97 (+1.9%)
Market Cap: $70.49B

About Zoetis

Zoetis Inc. engages in the discovery, development, manufacture, and commercialization of animal health medicines, vaccines, and diagnostic products and services in the United States and internationally. The company commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep and others; and companion animals comprising dogs, cats, and horses. It also offers parasiticides, vaccines, dermatology, other pharmaceutical, anti-infectives, animal health diagnostics, and medicated feed additives. 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 collaboration Blacksmith Medicines, Inc. to discover and develop novel antibiotics for animal health. Zoetis Inc. was founded in 1952 and is headquartered in Parsippany, New Jersey.

Zoetis Bull Case

Here are some ways that investors could benefit from investing in Zoetis Inc.:

  • Zoetis Inc. has shown strong financial performance, reporting earnings per share (EPS) of $1.40, which exceeded analysts' expectations of $1.37. This indicates robust profitability and effective management.
  • The company has a solid market capitalization of $71.08 billion, reflecting its strong position in the market and potential for growth.
  • With a current stock price of $157.54, Zoetis Inc. is trading below its 12-month high of $200.53, suggesting potential for price appreciation as the market stabilizes.
  • Analysts have a consensus rating of "Buy" for Zoetis Inc., with an average price target of $214.90, indicating positive sentiment and expected growth in the stock's value.
  • The company maintains a healthy financial structure with a current ratio of 3.69, which suggests it has sufficient assets to cover its short-term liabilities, reducing financial risk for investors.

Zoetis Bear Case

Investors should be bearish about investing in Zoetis Inc. for these reasons:

  • Despite recent positive earnings, the stock has experienced volatility, with a significant drop of $7.40 in a single trading session, which may indicate instability in investor confidence.
  • The company has a relatively high price-to-earnings (P/E) ratio of 29.61, which could suggest that the stock is overvalued compared to its earnings, potentially leading to a price correction.
  • Short interest in Zoetis Inc. has increased by 20.5% recently, indicating that more investors are betting against the stock, which could lead to downward pressure on the stock price.
  • Insider selling activity has been noted, with an executive selling shares, which may raise concerns about the company's future prospects from those within the organization.
  • The company has a debt-to-equity ratio of 1.26, which indicates a higher level of debt compared to equity, potentially increasing financial risk in a rising interest rate environment.

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