ZTS · NYSE · Pharmaceutical Preparations
$79.71 · $35.4B market value · fiscal year to 31 Dec 2025
Live from the latest filings
8 of 10
Buffett tests pass
Margin of safety 39%
Bear
$68.54
Base
$130.96
Bull
$218.79
Price $79.71
8 pass · 2 mixed · 0 fail · 0 can't tell
Return on equity averaged 56%, reaching 15% in 10 of the years measured; the weakest year was 47%. The ratio is unreliable: several years above 60% point to very little equity rather than extraordinary economics.
Why this testEach dollar retained over the period has been matched by 0.5× of market value created ($17.1B retained in total).
Why this testNo loss years across 15 years of filings, with operating margin varying by 2.8% around its average.
Why this testAfter-tax return on invested capital averaged 25% over 10 years and was 28% in the latest year.
Why this testTotal debt of $9.0B would take 3.6 yrs of normalised owner earnings to repay; operating income covers interest 16×. Both tests pass: payback within 4 years and interest cover of 8x or more.
Why this testNormalised owner earnings are $2.5B, and free cash flow has averaged 88% of reported profit.
Why this testCapital spending has averaged 1.1× depreciation; estimated maintenance capex was $555.0M last year.
Why this testThe diluted share count has changed by -1.3% a year. Shrinking means buybacks are returning value; growing means owners are being diluted.
Why this testAt $79.71, the price is 39% below the base-case value of $130.96 (the bear case is $68.54). The standard lens asks for a 25% margin.
Why this testThe owner-earnings yield is 7.1% against a 10-year Treasury yield of 5.2%.
Why this testDiscounted owner earnings
Bear
$68.54
Base
$130.96
Bull
$218.79
Price $79.71
| Scenario | Starting owner earnings | Growth (yrs 1–5) | Terminal | Discount | Value / share |
|---|---|---|---|---|---|
| bear | $2.5B | 4.6% | 1.5% | 9.7% | $68.54 |
| base | $2.5B | 8.6% | 2.5% | 8.2% | $130.96 |
| bull | $2.5B | 11.6% | 3.0% | 7.2% | $218.79 |
How sensitive is that?
| Discount ↓ / Growth → | 4.6% | 6.6% | 8.6% | 10.6% | 12.6% |
|---|---|---|---|---|---|
| 6.2% | $166 | $189 | $215 | $244 |
Fiscal year to 31 Dec 2025
Replicly is a research and education tool. It is not financial advice and does not recommend that you buy or sell any investment. Analyses apply Buffett-inspired principles to public data and can be wrong. Warren Buffett and Berkshire Hathaway are not affiliated with and do not endorse Replicly. Capital is at risk.
| $276 |
| 7.1% | $126 | $144 | $164 | $186 | $210 |
|---|
| 8.2% | $101 | $115 | $131 | $148 | $168 |
|---|
| 9.2% | $83 | $95 | $108 | $122 | $138 |
|---|
| 10.2% | $70 | $80 | $91 | $103 | $117 |
|---|
Green: at least 25% above the price. Amber: above it. Red: below it. n/a means the discount rate is at or below growth, where the model has no finite answer. The corners combine the most extreme assumptions, so treat them as bounds.
Discount rate: 10-year Treasury (5.2%) plus a 3% equity hurdle. Price $79.71 on 20 Oct 2026. End-of-day prices from free public sources, may be delayed or missing.
Revenue
$9.5B
Revenue growth (CAGR)
7.6%
Operating margin (avg)
34%
Return on equity (avg)
56%
ROIC (avg)
25%
Normalised owner earnings
$2.5B
Cash conversion
88%
Net debt
$6.7B
Debt payback
3.6 yrs
Share count change (CAGR)
-1.3%
Price / earnings
13×
Owner earnings yield
7.1%