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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Zoetis Inc. (XNYS:ZTS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ZTS
Name:
ZOETIS INC. (XNYS:ZTS)
Sector:
194.00M
Industry:
Drug Manufacturers�Specialty & Generic
CEO:
Mr. Juan Alaix
Total Employees:
12,100
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -2701.98% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ZOETIS INC.(ZTS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DRUG MANUFACTURERS�SPECIALTY & GENERIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
156.98
One Month Price Target:
$157.65
Six Month Price Target :
$161.01
Likely Price in One Year's Time:
Ticker:
$165.04
Likely Trading Range Today Under (Normal Volatility)
$156.55
Price Upper limit ($) :
$157.58
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$150.87
This week:
$143.31
This month :
$129.64
Other Primary facts
Market Cap:
73.42B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
468.14M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.98%
-14.7%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$185.34
$172.26
$128.62
$141.70
Medium risk (<10%) entry points
Buy Call
Sell Call
$168.00
Buy Put:
Sell Put:
$165.21
$145.92
$148.75
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ZTS
Sharpe Ratio:
2.32%
Comparison:
ZTS, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 154.34% higher than the industry
& ratio is 1.69% higher than the market/S&P 500 average
Average Returns/Yield of
ZTS
Daily returns:
0.05%
Weekly returns:
0.27%
Monthly returns:
1.07%
Yearly returns:
14.20%
Comparison of returns:
Average annual returns/yield (last 3 years) is -9.74% below industry average
Classification:
ZTS, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.59
Statistical test of Returns:
ZTS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.92%
Weekly Volatility:
4.30%
Monthly Volatility:
8.60%
Yearly Volatility:
29.78%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.42%
Volatility in last five trading days has been -26.37% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.89%
Weekly VaR:
-8.71%
Monthly VaR:
-17.42%
How Much Can the price of
ZTS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-60.33%
This translates to price declining to:
$133.76
This translates to price declining to:
$62.27
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
ZTS is a 22.92% riskier investment compared to the market/S&P 500 & is 5.31% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -48.88% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ZTS
Beta in relation to market/S&P 500--0.76
Expected beta in 1 year's time:
0.741
Expected beta in 3 year's time:
1.049
Unlevered (debt free) Beta:
0.392
Beta in relation to Nasdaq (XNAS):
0.747
Beta in relation to all global stocks::
0.69
Beta Comparison & Analysis
Beta of competitors/peers::
0.774
Beta is -1.32% lower than peers
Average Industry Beta:
1.054
Beta is -27.54% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
35.15%
Sustainable growth rate is 9.01% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.044
Alpha is 15.78% above industry average alpha yield
Alpha is 282% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ZTS
Equity cost of capital:
0.084
Equity cost of capital is -19.18% below industry mean WACC
Unlevered (without debt) cost of capital:
4.30%
Before-tax cost of debt:
3.27%
After-tax cost of debt:
2.58%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.58%
WACC is -27.09% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$16.86
Revenue growth rate per share of (3Y):
15.78
Annual revenue growth rate is -82.12% below industry average
EPS:
$4.36
Expected Annual growth rate of EPS (3Y):
10.79%
Expected future EPS growth rate is -54.02% lower than the Drug Manufacturers�Specialty & Generic industry
Free cash flow (FCF) per share:
$3.36
Balance sheet equity growth per share: 98.16%
Equity growth rate per share is 1395.46% higher than the industry
Debt per share
$11.51
EBITDA per share
$6.84
Valuation Analysis Today of
ZTS
P/E Ratio:
35.63
P/E Ratio of Competitors/Peers:
31.02
P/E ratio is 14.84% higher than main peers & is -10.85% lower than the industry
Stock price/value with industry average P/E ratio: $174.23
ZTS is -9.90% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $340.82
Present value of the expected future dividends only: $181.96
P/S (Price to Sales ratio):
9.31
Price to sales ratio is 31.55% above the industry mean
P/B (Price to book value ratio):
15.78
Price to free cash flow: 46.75
-
Net income growth rate (3Y):
44.92%
Net income growth rate is -108.20% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.43%
Dividend yeild: 0.73%
Previous Dividend: $0.33
Previous adjusted dividend: $0.33
Previous Dividend: $1.15
Expected next dividend best case: $0.37
Expected next dividend worst case: $0.28
Average dividend payment (long-term): $0.24
Average dividend increase/decrease (growth rate) % per period: 7.70%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 20/07/2022
Expected next dividend declaration date: 17/08/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 21/04/2022
Previous dividend declaration date: 19/05/2022
Dividend History:
2022-04-20--$0.33
2021-10-28--$0.25
2021-04-20--$0.25
2022-01-19--$0.33
2021-07-20--$0.25
2021-01-19--$0.25
Dividend growth rate is -796.28% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
115.63%
Net debt to equity ratio:
77.31%
Debt to assets ratio:
38.86%
Net debt to assets ratio:
25.98%
Debt-to-asset ratio is -24.60% below industry average
Ability to repay debt:
Interest coverage ratio:
14.56
Interest coverage ratio is 109.56% more than industry average
Looking forward:
Debt growth rate:
-8.41%
Annual debt growth is -228% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.749
Statistical significance of correlation:
ZTS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.408
Stock price is 83.48% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.408
Correlation of price movement with Nasdaq (^IXIC):
-0.004
Covariance of price movement with the market:
-0.004
Kurtosis
9.478
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.308
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ZTS
Gross Profit Margin Ratio:
282%
Operating Profit Margin Ratio:
35.95%
Operating profit margin is -206.91% lower than the industry
Net Profit Margin Ratio:
282%
Effective Tax Rate:
18.12%
Effective tax rate is 39.14% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
44.50%
Return on equity (ROE) is -547.40% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
14.96%
Return on assets (ROA) is -500.85% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
2.25
Current ratio is -31.60% below industry average
Cash Conversion Cycle (days):
59.2
Cash conversion cycle is -60.85% below industry average
The remaining useful life of property plant & equipment is: 4.5 years
Stock based compensation to net income ratio:
0.77%
In-depth Efficiency Analysis
Revenue generated per employee:
652.1K
Each employee generates -22% less revenue than industry average revenue per employee
EBITDA generated per employee:
264.8K
Each employee generates 180% more EBITDA than industry average revenue per employee
Profit generated per employee:
171.3K
Each employee generates 67% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
16.0K
Each employee generates -128% less free cash flow than industry average revenue per employee
Assets/Capital per employee
580.4K
Each employee generates -128% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 9.72%
Growth rate in R&D investment/expenditure is 48.07% higher than the industry
Competitors/Peer firms of
ZTS
STRYKER CORPORATION (XNYS:SYK)
ELEVANCE HEALTH, INC. (XNYS:ELV)
GSK PLC (XNYS:GSK)
CIGNA CORPORATION (XNYS:CI)
EDWARDS LIFESCIENCES CORPORATION (XNYS:EW)
BECTON, DICKINSON AND COMPANY (XNYS:BDX)
CVS HEALTH CORPORATION (XNYS:CVS)
BRISTOL-MYERS SQUIBB COMPANY (XNYS:BMY)
BOSTON SCIENTIFIC CORPORATION (XNYS:BSX)
Current Analyst Ratings
Strong buy�29%
Buy�29%
Hold�29%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
7.89B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.32B
5.57B
512.00M
-
2.06B
-
162.00M
2.73B
7.00M
220.00M
453.00M
3.20B
2.84B
2.07B
2.53B
458.00M
2.07B
Statement of Cash Flow
Date:
Period:
114.00M
Differed Income Tax :
- 45000.00K
Stock Based Compensation :
16.00M
Change in Working Capital :
- 385000.00K
Accounts Receivables:
- 102000.00K
Other Working Capital:
117.00M
Other Non-Cash Items:
15.00M
Net Cash Provided by Operating Activities:
309.00M
Investments in PP&E:
-
Net Acquisitions:
- 4000.00K
Purchases of Investments:
- 5000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
3.14B
-
3.14B
1.22B
2.06B
423.00M
6.84B
2.68B
2.69B
1.43B
-
103.00M
129.00M
7.02B
-
13.86B
402.00M
1.35B
142.00M
-
1.28B
3.03B
5.39B
495.00M
6.17B
-
9.20B
5.00M
7.63B
- 704000.0K
-
March 31, 2022 at 6:00:00 AM
5.05B
4.66B
13.86B
-
6.74B
3.6B
6.00M
- 115000.00K
- 118000.00K
-
-
- 361000.00K
- 154000.00K
- 30000.00K
- 545000.00K
4.00M
- 350000.00K
3.14B
3.49B
309.00M
- 115000.00K
194.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ZTS
2023
2024
2025
2026
2027
$183.63
$193.06
$202.96
$213.38
$224.33