Aureus
AExcellent

Zoetis Inc.(ZTS)

A

Financial data as of Dec 31, 2025Declining · Healthcare

FCF Margin23.2%Free Cash Flow / Revenue
Cash Conversion108.6%Operating CF / Net Income
Free Cash Flow$2.3B
Revenue$9.5B
Net Cash-$6.9BNet debt position
Debt / FCF4.2xElevated debt burden
Current Ratio3.03Adequate short-term liquidity
YoY FCF Growth-16.9%5 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseA
→
+0.5Healthy FCF margin with manageable debt (23.2%, 4.2x)
→
-0.5Moderate decline but healthy margin (-16.9% YoY)
→
FinalA

Analysis Summary

Strengths

  • Exceptional FCF margin (23.2%)
  • Excellent cash conversion (109%)
  • Strong liquidity (current ratio: 3.03)

Concerns

  • Net debt position ($6.9B) — 4.2x FCF, manageable
  • FCF trend declining (-16.9% YoY) but margin still healthy

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin23.2%
Net Margin28.2%
Operating CF Margin30.7%
CapEx Ratio6.6%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$6.9BNet debt position
Debt / FCF4.2xElevated debt burden
Current Ratio3.03Strong liquidity
Debt / Equity2.77High leverage

Quarterly FCF Trend

-16.9% YoYDeclining (-16.9%)

Free cash flow per quarter

Sector Comparison — Healthcare

FCF Margin ranked against sector peers

View all →

Detailed Metrics

Company NameZoetis Inc.
SectorHealthcare
Free Cash Flow$2.3B
Revenue$9.5B
Net Income$2.7B
Operating Cash Flow$2.9B
Capital Expenditure$621.0M
FCF Margin23.2%
Cash Conversion Rate108.6%
Net Margin28.2%
Total Debt$9.2B
Total Cash$2.3B
Net Cash-$6.9B
Current Ratio3.03
Debt / Equity2.77
Debt / FCF4.2x
YoY FCF Growth-16.9%
Positive Quarters5 of 5
Trend DirectionDeclining
Report DateDec 31, 2025
GradeA
Data SourceYahoo Finance

Related Research

All research →
Sector Report4 min read

Healthcare: 17 A-Grades, Seven Insurance Disasters

Pharma and devices print 20%+ margins. Health insurers struggle to break 3%.

May 25, 2026
GILDABBVBMYZTS+11
Sector Report4 min read

Healthcare: 16 A-Grades, Seven Insurance Failures

Healthcare has the highest A-grade count of any sector, but health insurance is broken at the free cash flow level.

Apr 24, 2026
GILDABBVBMYZTS+11
Sector Report4 min read

Healthcare: Eleven A-Grades and Three Falling Giants

The healthcare sector splits into two groups: companies printing cash and insurers bleeding it. The trend breakdown tells you which side is winning.

Feb 13, 2026
GILDREGNZTSISRG+11