Michael Burry is long the stock, several media outlets reported, citing his Substack disclosures. The stock is down about 40% so far this year. Let's break down whether it's worth buying.
Zoetis has dropped more than 70% from its 2021 peak. Burry thinks the company brings in better gross margins and has less debt than its peers. Competition is impacting the stock.
Elanco and Merck are taking share in dermatology and parasite treatments. US pet owners cut back on vet visits amid inflation. The company has slashed its guidance amid weaker trends.The Latest EarningsIn fiscal Q2 2026, revenue was roughly flat and down about 1% organically.
International revenue grew 6%. Adjusted EPS still grew 4% amid stock buybacks.Recently, the FDA granted emergency use for Simparica Trio to treat New World screwworm in dogs. The stock popped on the headline.
Zoetis trades near 12 times forward earnings, compared with a historical average of 30 times. The dividend is the highest it has ever been for the company, near 3%, with a payout ratio in the low 30s.As of the last quarter, Zoetis had about 86% of the US market for pet skin drugs, even after losing ground. Gross margins sit above 70%.
Return on equity runs around 65%. The pipeline has several candidates in areas like kidney disease, pain, and obesity, and new drugs Lenivia and Portela are rolling out in Canada and Europe.Insiders are buying too. Earlier this year, directors picked up stock on the open market during the slide.
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