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Zoetis Inc

ZTSBelow valueExpectations · modest

Held by 8 superinvestors.

Price$77.52
Margin of safety−11%
Holders8
Total value$250.9M

SEC 10-K · fundamentals

Business quality

as of 2025-12-31

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

Revenue growth
+2.3%
Net margin
28.2%
ROE
80.2%
FCF margin
24.1%
Revenue $6.67B → $9.47B · 6y
What makes a business high quality

Valuation · value band

Margin of safety

$87/ sh · growth-anchored intrinsic value
margin of safety
fair value
above fair value
$78
cheaperpricier

Zero-growth floor

$55

Central IV

$87

Optimistic top

$107

Zoetis Inc (ZTS): A conservative value band $55–$107 / sh (zero-growth floor to growth-capped optimistic top); central read about $87. Today’s price sits below that band (price $78 as of 2026-08-26).

The middle figure is the main read. The right end is the optimistic case under the same conservative caps — not an absolute ceiling.

Revenue growth 5% (lower of historical trend and fundamental cap, capped by moat) · moat 10 yr · discount 10.6% · Zero-growth downside $55

Price as of 2026-08-26 · yahoo · DGS10 4.7% @ 2026-08-26.

Method & numbers

Operating income is not reported separately (e.g. banks, insurers, and some diversified issuers), so earnings power is shown via the owner-earnings lens only; the unlevered NOPAT lens does not apply.

Model cautions

  • Owner-earnings yield diverges sharply from the 10-year Treasury (over 300 bps).

A conservative intrinsic-value band (zero-growth floor to growth-capped DCF) plus a tangible asset floor — not investment advice, not a buy/sell signal, and not a price target.

Owner-earnings DCF $57.12 – $107.31 · Greenwald zero-growth $66.88 · zero-growth base $66.88 · reproduction $3.12

Moat Franchise (moat) · terminal value 49% of present value · owner-earnings yield 8% vs 10Y 4.7%.

Graham earnings-power value (normalized NOPAT)

Operating income is not reported separately (e.g. banks, insurers, and some diversified issuers), so earnings power is shown via the owner-earnings lens only; the unlevered NOPAT lens does not apply.

Normalized NOPAT from operating margin — not applicable when operating income is not reported separately. Unlevered (pre-interest, attributable to all capital). Capitalized at the 9–11% rate band (read as a WACC proxy). Enterprise → equity bridge (+ cash − total debt) — not applied (lens not assessable).

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

Buffett owner-earnings value$54.72 – $66.88 / sh

Owner earnings = average net income + average D&A − maintenance capex (zero-growth floor; no ΔNWC). Levered (starts from net income, already after interest — an equity-holder stream). Capitalized at the 9.0–11.0% band (9–11% base + 0.0pp leverage premium). No enterprise→equity bridge: the capitalized result is already equity value (subtracting debt would double-count interest).

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

v1 simplifications: Owner earnings = net income + D&A − maintenance capex (ok); the working-capital change is excluded (maintenance ΔNWC ≈ 0; growth ΔNWC is carried in growth value, not double-counted). One-time items are not separately normalized (multi-year averaging smooths them partially). Share-based compensation is left as a real expense (not added back); see the SBC/OE disclosure. Capitalized at the 9–11% base band plus a 0.0pp leverage premium (cost of equity rises with leverage — MM Proposition II). Net debt is about 3.0 years of owner earnings, adding 0.0pp of cost-of-equity risk premium.

Asset floor: Reproduction value = tangible net assets + acquired-intangible reset proxy, ÷ diluted shares; tangible net assets alone are negative for this asset-light franchise (no R&D history to capitalize).

Moat reading: Franchise test compares earnings power (EPV) against reproduction value (tangible net assets + capitalized R&D). EPV well above reproduction value signals a moat; near it, a commodity; below it, value destruction. A directional reading, not a verdict.

Assumes a narrow moat · competitive-advantage period ≈ 10 years.

Growth value not assessable — Operating income is not available across the window, so ROIIC / growth value cannot be computed.

Window TTM 2026-06-30, FY 2024, 2023, 2022, 2021 · discount band 9%–11% · normalized tax 20% (Average effective tax rate over 5 year(s), capped at the statutory 21%.) · diluted shares.

Baseline 9%–11%, net debt ≈ 3.0 years of owner earnings → +0.0pp cost-of-equity premium → effective 9.0%–11.0%.

Owner-earnings DCF: growth g₁ 5% · OE FY TTM 2026-06-30, 2024, 2023, 2022, 2021 · Discount band: 9.17%–12.01% (DGS10 +4.5% to a 12% strict end, each +0.01pp for leverage premium, as of 2026-08-26). No enterprise→equity bridge: owner earnings already flow to shareholders (post-interest), so no net cash is added and no debt subtracted — matching the engine owner-earnings lamp.

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

What the price is betting

Today's price pencils in about 2.9% a year in owner-earnings for the next few years. Revenue actually grew 6.9% a year.

Below what it has already done.

Roughly, the price needs its historical revenue growth to run about 6 more years to hold up.

How to read intrinsic value

SEC 13F · holders

Superinvestors Holding This Security

8 holders · $250.9M combined · this quarter +2 opened / -2 exited

This quarter2 opened2 added3 trimmed2 exited
Holders 7 → 8 · last 8q
Exited this quarter (2)
David RolfeTerry Smith

SEC 13F · notes

Written summary

Zoetis Inc (ZTS) is held by 8 of the superinvestors tracked on Compounder, with a combined $250.9M in reported 13F value. The largest position belongs to Ruane, Cunniff (Sequoia), where it makes up 2.6% of the portfolio.

Other notable holders by value include Tweedy, Browne (3.0% of its book), Polen Capital (0.2% of its book) and Ray Dalio (0.0% of its book).

Over the latest quarter, 2 of the tracked filers opened a new position in ZTS, 2 added to existing ones, 3 trimmed, and 2 sold out entirely.

Holder counts and values reflect the most recent SEC Form 13F filings, through the quarter ended 2026-06-30. Source: SEC EDGAR. A 13F shows only long US-listed positions and can lag the real portfolio by up to 45 days, so this is disclosed long ownership, not a complete picture.

How to read a 13F

SEC 13F · co-ownership

Also held by these investors

Investors holding Zoetis Inc (ZTS) also commonly hold →

ZTS's price is below its conservative value band. Browse all undervalued stocks by margin of safety

Also on

Sources· SEC EDGAR 13F as of 2026-06-30 · filed 2026-08-14

Educational data only — not investment advice. 13F positions are self-reported and can lag up to 45 days.

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