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, a Price to Book Value of 17.32, and an EV to EBITDA of 21.76. In comparison, Eli Lilly & Co. has a higher P/E of 40.89, while Johnson & Johnson shows a lower P/E of 26.18, indicating that Zoetis is positioned competitively within its peer group.
Despite the fair valuation, Zoetis has underperformed relative to the S&P 500, with a year-to-date return of -11.58% compared to the S&P 500's 13.30%. This trend continues over longer periods, with a 5-year return of -11.92% against the S&P 500's impressive 91.29%, suggesting that while the stock may be fairly valued, it faces significant challenges in generating returns compared to broader market benchmarks.