MeritValue

Zoetis Inc.

ZTSdata completeness 100%15 fiscal years on file
The thesis, from the filings

Zoetis Inc. earns about 28% on invested capital, far above its ~9% cost of capital, and has bought back 7% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $54.73 and $139.95 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$7.78B1$8.08B2$8.54B3$9.26B3$9.47B3
Net income$2.04B4$2.11B5$2.34B6$2.49B6$2.67B6
Operating cash flow$2.21B7$1.91B8$2.35B9$2.95B9$2.9B9
Capital expenditure$477M10$586M11$732M12$655M12$621M12
Free cash flow (derived)$1.74B7$1.33B8$1.62B9$2.3B9$2.28B9
Total debt$6.59B13$7.9B14$6.57B15$6.57B16$9.04B16
Cash & equivalents$3.49B17$3.58B18$2.04B18$1.99B18$2.31B18
Diluted shares476.7M470.4M462.3M454.8M443.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$75.05
your share of equity
Profit it earned you last year
$60.23
Free cash flow it threw off
$51.44
Debt you’d be carrying
$203.72

10 shares is a claim on $75.05 of net worth that earned you $60.23 and generated $51.44 of cash last year, against $203.72 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
28% avg · 5y
FY21 29%FY22 26%FY23 27%FY24 29%FY25 28%

It earned about 28% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−7% shares · 5y

Share count is down 7% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 37% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $54.73 and $139.95 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$139.95
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth10.9%
  • fcfBase$2.28B
DCF · Growth Exit 5Y
$101.73
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth10.9%
  • fcfBase$2.28B
Earnings Power Value
$54.73
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$2.34B
  • growthAssumed0.0%
Graham Number
$31.88
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years10.9%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $101.73
The three cases
Bear0.0%$58.33
Base10.9%$101.73
Bull15.9%$127.82

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 10.9%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001555280-24-000143 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001555280-25-000102 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001555280-26-000011 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001555280-24-000143 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001555280-25-000102 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001555280-26-000011 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001555280-24-000143 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001555280-25-000102 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001555280-26-000011 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001555280-24-000143 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001555280-25-000102 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001555280-26-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001555280-23-000074 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001555280-24-000143 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001555280-25-000102 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001555280-26-000011 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0001555280-25-000102 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  18. 10-K · period ending 2022-12-31 · accession 0001555280-26-000011 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)