Zoetis FY 2025 earnings snapshot

Zoetis (ZTS) has just posted its FY 2025 third quarter numbers, with revenue of US$2.4b and basic EPS of US$1.63, giving investors a fresh read on how the business is tracking this year. The company has seen quarterly revenue range from US$2.22b in Q1 2025 to US$2.46b in Q2 2025, while basic EPS moved from US$1.41 to US$1.61 over the same period, set against trailing twelve month EPS of US$5.94 on revenue of US$9.40b. With a current share price around US$125.64, the latest results put the focus on how durable Zoetis's margins and earnings power look heading into the rest of the year.

With the headline numbers on the table, the next step is to see how this earnings print lines up against the broader narratives investors follow about Zoetis's growth runway, profitability and risk profile.

9.1% earnings growth and 28.2% margin frame profitability story

• Over the last 12 months, Zoetis generated US$9.4b in revenue with net income of US$2.7b, which works out to a 28.2% net margin and 9.1% earnings growth compared with the prior year margin of 26.6%.
• Supporters of the bullish view point to this combination of 9.1% earnings growth and a 28.2% margin as evidence that the business can keep expanding profitably, yet
  • the more optimistic narrative assumes margins could reach 29.7% in a few years, which is higher than the current 28.2% and therefore depends on further improvement beyond what is shown in the latest trailing figures,
  • while current quarterly data, with net income of US$721 million on US$2.4b of revenue in Q3 2025, already reflects a high profitability level that may leave less room for easy margin gains than the bullish case suggests.

Supporters who think this profit profile still leaves room for meaningful upside compared with the bullish view may want to see how the detailed thesis stacks up against these margins and growth rates in the latest numbers. 🐂 Zoetis Bull Case

P/E of 20.9x and DCF fair value create valuation tension

• Zoetis trades on a P/E of 20.9x, slightly below the US pharmaceuticals industry average of 21.4x and peer average of 22.6x, while the current share price of US$125.64 sits below a DCF fair value estimate of about US$203.62.
• Consensus narrative highlights meaningful long term potential in key franchises and international expansion, and the current data gives a mixed read on that idea because
  • earnings and revenue are forecast to grow at about 6.3% and 5.1% per year, which is slower than the broader US market growth rates cited, even though the P/E discount to peers and the DCF fair value gap suggest the market is not pricing Zoetis as a high growth name,
  • yet the trailing 12 month earnings of US$2.7b and margin of 28.2% show that the business is already producing sizeable profits, which can make a below peer P/E look more reasonable to investors who focus on steady cash generation rather than higher growth expectations.

High debt and below market growth support cautious arguments

• Bears focus on the company’s high level of debt and point out that forecast earnings growth of about 6.3% per year and revenue growth of about 5.1% per year are below the broader US market figures of 15.7% and 10.4% respectively.
• Skeptics argue that these below market growth rates and the flagged leverage risk limit upside, and the current numbers give them some backing because
  • even with trailing revenue at US$9.4b and net income at roughly US$2.7b, the growth outlook remains more modest than the wider market, so the case for re rating depends less on acceleration and more on how investors weigh the quality and stability of those profits against the debt load,
  • while the DCF fair value of about US$203.62 and analyst target of US$152.81 both sit above the current US$125.64 share price, which runs counter to the most cautious stance and shows that, despite the debt flag, neither the modelled cash flow view nor the target price data are aligning with a strongly bearish pricing outcome right now.

For readers who lean toward the cautious side, this mix of slower forecast growth and balance sheet risk versus the current price and target of US$152.81 is exactly what the more skeptical narrative tries to unpack in detail. 🐻 Zoetis Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Zoetis on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See the numbers differently? Take a couple of minutes to test your own thesis against the data and shape a narrative that fits your view. Do it your way

A great starting point for your Zoetis research is our analysis highlighting 6 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Zoetis combines high margins with a high debt load and slower forecast earnings and revenue growth than the broader US market, which can cap enthusiasm.

If that mix of leverage and slower growth makes you hesitate, take a moment to focus on companies screened for resilience with 85 resilient stocks with low risk scores that could better match a cautious approach.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.