Should you buy Zoetis stock? (February 2024)

Published first at https://www.3minutebreakdowns.com Zoetis stock analysis. Ticker: $ZTS Zoetis is a leading healthcare company that provides medicine for animals. At the current share price, the company has a market cap of just over 91 billion dollars. Revenue over the last 12 months is 8.5 billion with 2.3 billion of net income and 3.5 billion of EBITDA. So the stock is valued at 39 times earnings or 28 times EBITDA. That may sound expensive but for Zoetis, it’s actually below the historical average. Over the last 10 years, Zoetis’s PE ratio has gone as high as 70 and just two years ago it was at 60. There are two key reasons for that high valuation. First, the animal and pet category is extremely resilient. Owners treat their pets as family members and they spend money on them through good times and bad. Second, Zoetis has a near monopoly in the industry and the business has performed incredibly well. Net income has grown every single year for the last 10 years with net income margins also steadily increasing. Current net income margin sits at 27% which means almost a third of revenue is flowing to the bottom line. The company spends a minimal amount on stock based compensation and the number of shares outstanding has fallen by around 8% over the last 10 years. #investing #stocks #stockstobuy #3mb