It has been about a month since the last earnings report for Zoetis (ZTS). Shares have added about 1.7% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Zoetis due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Zoetis Q3 Earnings Beat, Revenues Miss, ‘25 Sales View Cut
Zoetisdelivered third-quarter 2025 adjusted earnings (excluding one-time items) of $1.70 per share, which surpassed the Zacks Consensus Estimate of $1.62. In the year-ago quarter, the company delivered adjusted earnings of $1.58 per share.
Total revenues grew 1% year over year to $2.4 billion in the reported quarter, which missed the Zacks Consensus Estimate of $2.41 billion. In the year-ago quarter, the company reported total revenues of $2.39 billion.
ZTS’ Q3 Results in Detail
Zoetis derives the majority of its revenues from a diversified product portfolio of medicines and vaccines used to treat and protect livestock and companion animals. The company reports business results under two geographical operating segments — the United States and International.
Revenues from the U.S. segment decreased 2% year over year to $1.32 billion in the reported quarter, missing the Zacks Consensus Estimate of $1.34 billion as well as our model estimate of $1.38 billion.
Sales of companion animal products in the U.S. region were flat year over year at $1.07 billion. Growth in Zoetis’ parasiticides portfolio, including Simparica and Revolution franchises, diagnostics and key dermatology portfolio, including Apoqueland Cytopoint, was offset by a decline in the sales of ZTS’ monoclonal antibody products for osteoarthritis (OA) pain, Librela for dogs and Solensiafor cats, likely due to fears of side effects in some dogs. This has also likely contributed to Zoetis’ stock price drop today.
Apoquel is also approved as the first and only chewable treatment in the United States for controlling pruritus related to allergic dermatitis and control of atopic dermatitis in dogs at least 12 months of age. Earlier this year, the FDA approved a new indication for Zoetis’ flea, tick and heartworm combination product for dogs, Simparica Trio, to prevent flea tapeworm infections by targeting and killing vector fleas in treated dogs. With this approval, the triple combo drug is now the only canine combination parasiticide indicated to prevent flea tapeworm infections at the source by eliminating carrier fleas before they can transmit the parasite.
Sales of livestock products in the United States decreased 9% in the third quarter to $253 million. The decline was mainly due to the divestiture of the medicated feed additive (MFA) product portfolio and related assets.
Revenues in the International segment increased 3% year over year on a reported basis and up 1% on an operational basis to $1.06 billion, beating the Zacks Consensus Estimate of $1.04 billion as well as our model estimate of $1.03 billion.
Ex-U.S. sales of companion animal products rose 8% on a reported basis and 4% operationally to $583 million, driven by growth in several key products. These included Zoetis’ parasiticides portfolio, including both Simparica and Revolution/Stronghold franchises, as well as key dermatology products Apoquel and Cytopoint.
Livestock product sales declined 2% year over year on a reported basis and 3% operationally to $472 million, largely due to the divestiture of the MFA product portfolio and related assets.
ZTS Cuts Sales Guidance for 2025
Zoetis maintained its previously announced guidance for 2025 adjusted earnings in the band of $6.30-$6.40 per share.
However, the company has cut its 2025 revenue projection to $9.4-$9.475 billion from the previously guided range of $9.45 billion to $9.6 billion, further fueling the downward trend of the stock price today.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -5.69% due to these changes.
VGM Scores
Currently, Zoetis has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock has a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Zoetis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Zoetis Inc. (ZTS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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