Zoetis Inc (ZTS, Financial) has recently garnered significant attention from investors and financial analysts, thanks to its strong financial position. With a current share price of $176.74, Zoetis Inc has experienced a slight daily decrease of 0.02%, amidst a three-month decline of 2.26%. However, a detailed analysis based on the GF Score indicates that Zoetis Inc is poised for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key valuation aspects. These aspects have shown a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield better returns. The GF Score ranges from 0 to 100, with 100 representing the highest potential for outperformance. Zoetis Inc boasts a GF Score of 95, indicating a strong potential for market outperformance.
- Financial strength rank: 6/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 7/10
- Momentum rank: 5/10
Understanding Zoetis Inc's Business
Zoetis Inc, with a market cap of $80.65 billion and annual sales of $8.73 billion, leads the industry in animal health products, including anti-infectives, vaccines, and diagnostics. The company, which was formerly a part of Pfizer, generates approximately 35% of its revenue from production animals and 65% from companion animals. Its U.S. operations focus more on companion animals, whereas its international segment leans slightly towards production animals. This diversified portfolio positions Zoetis Inc uniquely in the market.
Financial Strength Breakdown
Zoetis Inc's financial robustness is evident through its impressive Interest Coverage ratio of 13.43, significantly above the benchmark of 5 set by investment guru Benjamin Graham. Additionally, its Altman Z-Score of 7.94 indicates a strong buffer against financial distress, and a Debt-to-Revenue ratio of 0.78 showcases prudent debt management.
Profitability and Growth Metrics
Zoetis Inc's profitability is highlighted by its increasing Operating Margin, which has grown consistently over the past five years, reaching 35.92% in 2023. The company's Gross Margin also reflects a steady increase, demonstrating its efficiency in converting revenue into profit. Furthermore, Zoetis Inc's growth is underscored by a 9.8% 3-Year Revenue Growth Rate, outperforming 58.83% of its peers in the Drug Manufacturers industry.
Conclusion
Considering Zoetis Inc's strong financial strength, exceptional profitability, and consistent growth metrics, the GF Score highlights the company's unparalleled position for potential outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
