Stock fact sheet · data as of
Zoetis Inc. (ZTS): fair value, margin of safety and Wheel Score
Healthcare · Drug Manufacturers - Specialty & Generic · United States · Quality / Blue-Chip
Is ZTS undervalued?
ZTS closed at 75.34 on 16 Oct 2026, 21% below the GLS average fair value of 95.52 from 9 models (4 of them above the price). That is a moderate margin of safety: the stock passes the "below fair value" rule of the Sunday Scan, and the Wheel Score gives it 21 of the 25 Value points.
There is a wide gap between DDM (30.75) and Graham Growth (173.47). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
The nightly engine files ZTS under Quality / Blue-Chip: a high moat score and a high health score together.
Nine valuation models for ZTS
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 154.66 | +105% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 32.60 | -57% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 173.47 | +130% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 62.08 | -18% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 53.89 | -28% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 152.22 | +102% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 130.38 | +73% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 30.75 | -59% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 69.60 | -8% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -12.80 | -117% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 87.33 | +16% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Zoetis Inc. scores 7 of 9 on the Piotroski F-score, the nine yes/no tests of profitability, leverage and efficiency on the latest annual accounts - a strong reading that passes the Sunday Scan's "6 or more" rule with room to spare. A GLS Moat score of 7.8/10 puts ZTS among the more durable businesses we track: over ten years the metrics the score watches (revenue, EPS, book value, margins, cash flow, ROIC) have mostly moved the right way, year after year.
Returns on capital are high - ROIC 20.8%, ROE 80.2%, ROA 17.3% - with debt at 2.85 times equity and a free-cash-flow yield of 7.5%. Debt of 2.85 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.
The dividend yield is 2.77% at a payout ratio of 34%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Dogs and Cats 68%, Cattle 16%, Swine 5% (quarter Q2 FY2026).
Institutional ownership scores 10/10, insider activity 10/10 and Congressional trading 7/10 on the GLS smart-money scales; the last recorded insider buy was on 17 Sep 2026.
| Piotroski F-score | 7 / 9 | ROIC | 20.8% |
|---|---|---|---|
| GLS Moat | 7.8 / 10 | ROE | 80.2% |
| Debt / equity | 2.85 | ROA | 17.3% |
| Free-cash-flow yield | 7.5% | Payout ratio | 34% |
| Institutions | 10 / 10 | Insiders · Congress | 10 · 7 / 10 |
Wheel Score 89: Prime
With a Wheel Score of 89, Zoetis Inc. sits in the Prime band - price, quality and premium all line up for the wheel strategy. The parts: Value 21/25, Health 16/20, Moat 12/15, Premium 20/20, Stability 20/20. A high score is a ranking, not a signal: it says nothing about timing, the earnings date or your position size.
Implied volatility is 46% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. The option chain is deep: 172,489 contracts of open interest across all expiries, which means tight fills at most strikes.
Volume runs at 2.5M shares a day on a market cap of $31.6B, with a beta of 0.74 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 20 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 21 / 25 | 21% margin of safety | |
| Health | 16 / 20 | Piotroski 7/9 | |
| Moat | 12 / 15 | moat 7.8/10 | |
| Premium | 20 / 20 | implied volatility 46% | |
| Stability | 20 / 20 | 2.5M shares/day, $31.6B cap, beta 0.74 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 3 Nov 2026 (before the open), 18 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium. The shares go ex-dividend on 30 Oct 2026 (0.5300 per share), so a covered call sold before then carries a small early-assignment risk around that date.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Drug Manufacturers - Specialty & Generic
The 12 companies below are the closest to Zoetis Inc. by market cap within the Drug Manufacturers - Specialty & Generic industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| HLN Haleon plc | 9.94 | 6.22 | -60% | 69Good | $43.7B |
| TEVA Teva Pharmaceutical Industries Limited | 40.72 | 21.81 | -87% | 59Fair | $47.5B |
| VTRS Viatris Inc. | 17.44 | 18.82 | +7% | 45Weak | $20.0B |
| TAK Takeda Pharmaceutical Company Limited | 19.01 | 1,108.41 | +98% | 82Prime | $60.3B |
| ELAN Elanco Animal Health Incorporated | 23.54 | 11.45 | -106% | 45Weak | $11.8B |
| RDY Dr. Reddy's Laboratories Limited | 12.75 | 153.50 | +92% | 82Prime | $10.6B |
| ALKS Alkermes plc | 40.10 | 22.14 | -81% | 56Fair | $6.7B |
| LNTH Lantheus Holdings, Inc. | 99.99 | 183.99 | +46% | 60Fair | $6.5B |
| AMRX Amneal Pharmaceuticals, Inc. | 19.25 | 12.43 | -55% | 57Fair | $6.1B |
| INDV Indivior Pharmaceuticals Inc | 33.62 | 56.88 | +41% | 75Good | $4.2B |
| RGC Regencell Bioscience Holdings Limited | 8.11 | 0.0281 | -28765% | 25Weak | $4.0B |
| HCM HUTCHMED (China) Limited | 13.94 | 2.93 | -376% | 42Weak | $2.4B |
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Start free See the Sunday ScanQuestions about ZTS
Is ZTS undervalued right now?
By the GLS models, moderately: at 75.34 the stock trades 21% below the average fair value of 95.52 (data as of 16 Oct 2026).
What is the Wheel Score of ZTS and what does it mean?
ZTS scores 89 out of 100 (Prime). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for ZTS?
95.52 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Zoetis Inc. report earnings next?
The next earnings report is due on 3 Nov 2026 (before the open), 18 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does ZTS have listed options, and how liquid are they?
Yes. The nightly snapshot found 506 listed contracts with 172,489 open interest across all expiries and implied volatility of 46% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.