Zoetis Shares Drop 3.19% on Mixed Earnings, Slides to 110th in Daily Trading Volume

Market Snapshot

Zoetis Inc. (ZTS) shares declined 3.19% on November 5, 2025, following the release of mixed third-quarter fiscal year 2025 results. Trading data showed a daily trading volume of $1.01 billion, a 32.68% drop from the prior day, with the stock ranked 110th in volume across the market. The stock’s performance reflects broader investor concerns over the company’s revised revenue guidance and underwhelming sales in key segments, despite an earnings-per-share (EPS) beat.

Key Drivers

Zoetis’ mixed Q3 FY25 results, characterized by an adjusted EPS of $1.70 (exceeding estimates of $1.62) but revenue of $2.4 billion (missing consensus by $10 million), drove the stock’s sharp decline. While net income rose 6% year-over-year to $721 million, total revenue growth was flat compared to the prior year, reflecting uneven performance across business segments. The U.S. segment reported a 2% year-over-year revenue decline on a reported basis, driven by a 9% drop in livestock product sales due to the divestiture of medicated feed additive (MFA) assets. Companion animal product sales remained flat, as growth in parasiticides and dermatology portfolios was offset by declining monoclonal antibody (mAb) sales for osteoarthritis (OA) treatments like Librela and Solensia.

The International segment, however, showed resilience, with revenue rising 3% year-over-year to $1.1 billion. Sales of companion animal products grew 8% reported and 4% operationally, supported by international approvals for key therapies such as Apoquel Chewable in Chile and Cytopoint for allergic dermatitis in Brazil. Notably, the EU’s positive opinion for Lenivia—a long-acting OA therapy for dogs—positions Zoetis to expand its biologics portfolio. Despite these advancements, the company’s full-year revenue guidance was cut to $9.4–$9.475 billion, below the previous $9.45–$9.6 billion range, signaling ongoing operational challenges.

Product-specific headwinds further pressured investor sentiment. The decline in mAb sales for OA treatments, attributed to safety concerns (e.g., side effects in dogs), highlighted vulnerabilities in Zoetis’ therapeutic pipeline. Additionally, livestock segment underperformance persisted, with the MFA divestiture continuing to weigh on results. Analysts noted that while the adjusted EPS beat provided a temporary cushion, the revenue shortfall and guidance cut underscored broader macroeconomic pressures and competitive dynamics in the animal health sector.

The stock’s 13% premarket drop also reflected a broader market reaction to the revised outlook. Institutional ownership remains strong, with 92.8% of shares held by large investors, but the guidance cut and margin compression (operating margin fell to 37% from 38.3% in the prior year) raised questions about Zoetis’ ability to sustain growth. Analysts highlighted that the company’s international expansion and product approvals, such as Portela (a feline OA therapy) and Simparica Trio’s new label for flea tapeworm prevention, could reinvigorate momentum in 2026. However, near-term challenges—including foreign exchange pressures and the need to replace revenue from divested assets—remain unresolved.

Zoetis’ financial health remains robust, with a 27.83% net margin and a 56.90% return on equity, but the stock’s 30.2% decline from its 52-week high and a P/E ratio of 24.86 suggest market skepticism. The company’s dividend of $0.50 per share, yielding 1.4%, offers some stability, yet analysts emphasized that earnings growth and operational execution will be critical for reversing the stock’s downward trajectory. As Zoetis prepares for the 2026 launch of Lenivia and the EU rollout of Portela, the market will closely monitor its ability to balance short-term challenges with long-term innovation in a competitive animal health landscape.