Is Zoetis, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Zoetis, Inc. moved from expensive to fair. The company appears to be fairly valued based on its current metrics. Key ratios include a P/E ratio of 31, an EV to EBITDA of 21.76, and a PEG ratio of 3.69. In comparison, Eli Lilly & Co. has a higher P/E ratio of 40.89, while Johnson & Johnson shows a lower P/E of 26.18, indicating that Zoetis is positioned reasonably within its peer group.
Despite its fair valuation, Zoetis has underperformed relative to the S&P 500, with a year-to-date return of -11.58% compared to the index's 13.30%. This trend is further emphasized by a five-year return of -11.92% for Zoetis versus the S&P 500's impressive 91.29%, suggesting that while the stock may be fairly valued, it has not delivered strong returns relative to broader market performance.