Could You Be Missing Zoetis Stock’s Upside?

Here is why we think Zoetis (ZTS) stock deserves consideration as a value stock. It is currently trading nearly 32% below its 1 year high, and also trading at a PS multiple which is below the average for the last 3 years. However, it is growing, even though modestly, and has strong margins to go with its low valuation.

Zoetis navigates recent market headwinds, with Q3 2025 revenue up 1% reported, yet revised 2025 outlook citing “subdued clinic traffic” led to a 13.78% stock drop on November 4. Despite this, the international segment delivered 6% organic revenue growth in Q3. The company’s pipeline bolsters future prospects with EU approval for Portela, a cat osteoarthritis pain monoclonal antibody, and the global rollout of AI-powered Vetscan OptiCell diagnostics, serving the expanding $60-70 billion animal health market.

Let’s talk numbers

• Revenue Growth: 2.7% LTM and 5.5% last 3 year average. Low growth, but this is a margin and value play.
• Strong Margin: Nearly 36.8% 3-year average operating margin.
• No Major Margin Shock: Zoetis has avoided any large margin collapse in the last 12 months.
• Modest Valuation: Despite encouraging fundamentals, ZTS stock trades at a PE multiple of 20.1

As a quick background, Zoetis provides animal health medicines, vaccines, and diagnostic products for various livestock species, preventing diseases affecting respiratory, gastrointestinal, and reproductive systems.

No matter where ZTS stock goes, your portfolio should stay on track. See how High Quality Portfolio can help you do that.

*LTM: Last Twelve Months

But do these numbers tell the full story? Read Buy or Sell ZTS Stock to see if Zoetis still has an edge that holds up under the hood.

Stocks Like These Can Outperform. Here Is Data

Below are statistics for stocks with same selection strategy applied between 12/31/2016 and 6/30/2025.

• Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively
• Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
• Strategy consistent across market cycles.

But Consider The Risk

That said, ZTS isn’t immune to market downturns. It fell about 17% during the 2018 correction, took a sharper hit of 36% in the Covid crash, and dropped nearly 47% in the recent inflation shock. Even with solid fundamentals, the stock can still see big swings when broader sell-offs hit. Quality helps, but no stock is completely crash-proof.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read ZTS Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.