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Zoetis Inc – Pharmaceutical Preparation Manufacturing
Zoetis Inc. is an American drug company, the worlds largest producer of medicine and vaccinations for pets and livestock. The company was a subsidiary of Pfizer, the worlds largest drug maker, but with Pfizers spinoff of its 83% interest in the firm it is now a completely independent company.
Analysis Results
Intrinsic Value $161.95
Latest Price $176.68
Relative Value 9% overvalued
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Cash Flow (Billions)
Analysis Parameters
New Ticker
Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 18.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 18.6%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 3.25 2.98
2024 3.85 3.25
2025 4.57 3.53
2026 5.42 3.85
2027 6.43 4.19
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 94.8 billion. This corresponds to a present value of 56.7 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 17.8 billion. Adding in the terminal value gives a total present value of 74.5 billion.

There are presently 460.0 million outstanding shares, so the intrinsic value per share is 161.95.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 7,506,000,000
Current Cash 3,581,000,000
Current Liabilities 3,167,000,000
Current Debt 1,352,000,000
Non-Cash Working Capital (NCWC) 2,110,000,000
Change in NCWC 462,000,000
EBIT 2,932,000,000
Tax Provision 545,000,000
Depreciation and Amortization 465,000,000
Capital Expenditure -586,000,000
Unlevered Free Cash Flow 2,671,365,963
Current Assets 6,930,000,000
Current Cash 3,485,000,000
Current Liabilities 1,797,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,648,000,000
Change in NCWC 207,000,000
EBIT 2,813,000,000
Tax Provision 454,000,000
Depreciation and Amortization 448,000,000
Capital Expenditure -477,000,000
Unlevered Free Cash Flow 2,477,695,337
Current Assets 6,611,000,000
Current Cash 3,604,000,000
Current Liabilities 2,170,000,000
Current Debt 604,000,000
Non-Cash Working Capital (NCWC) 1,441,000,000
Change in NCWC -67,000,000
EBIT 2,281,000,000
Tax Provision 360,000,000
Depreciation and Amortization 441,000,000
Capital Expenditure -453,000,000
Unlevered Free Cash Flow 1,790,597,194
Current Assets 4,748,000,000
Current Cash 1,934,000,000
Current Liabilities 1,806,000,000
Current Debt 500,000,000
Non-Cash Working Capital (NCWC) 1,508,000,000
Change in NCWC 24,000,000
EBIT 2,034,000,000
Tax Provision 301,000,000
Depreciation and Amortization 412,000,000
Capital Expenditure -460,000,000
Unlevered Free Cash Flow 1,670,058,856
Current Assets 4,399,000,000
Current Cash 1,701,000,000
Current Liabilities 1,223,000,000
Current Debt 9,000,000
Non-Cash Working Capital (NCWC) 1,484,000,000
Change in NCWC -75,000,000
EBIT 1,909,000,000
Tax Provision 266,000,000
Depreciation and Amortization 308,000,000
Capital Expenditure -338,000,000
Unlevered Free Cash Flow 1,503,530,177
Current Assets 4,217,000,000
Current Cash 1,564,000,000
Current Liabilities 1,094,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,559,000,000
Change in NCWC 13,000,000
EBIT 1,737,000,000
Tax Provision 663,000,000
Depreciation and Amortization 242,000,000
Capital Expenditure -224,000,000
Unlevered Free Cash Flow 1,012,832,131
Current Assets 3,390,000,000
Current Cash 727,000,000
Current Liabilities 1,117,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,546,000,000
Change in NCWC 246,000,000
EBIT 1,427,000,000
Tax Provision 409,000,000
Depreciation and Amortization 240,000,000
Capital Expenditure -216,000,000
Unlevered Free Cash Flow 1,221,720,684
Current Assets 3,830,000,000
Current Cash 1,154,000,000
Current Liabilities 1,781,000,000
Current Debt 405,000,000
Non-Cash Working Capital (NCWC) 1,300,000,000
Change in NCWC -204,000,000
EBIT 1,094,000,000
Tax Provision 206,000,000
Depreciation and Amortization 199,000,000
Capital Expenditure -224,000,000
Unlevered Free Cash Flow 451,488,073
Current Assets 3,465,000,000
Current Cash 882,000,000
Current Liabilities 1,086,000,000
Current Debt 7,000,000
Non-Cash Working Capital (NCWC) 1,504,000,000
Change in NCWC 157,000,000
EBIT 1,001,000,000
Tax Provision 233,000,000
Depreciation and Amortization 204,000,000
Capital Expenditure -180,000,000
Unlevered Free Cash Flow 897,569,512
Current Assets 3,357,000,000
Current Cash 610,000,000
Current Liabilities 1,415,000,000
Current Debt 15,000,000
Non-Cash Working Capital (NCWC) 1,347,000,000
Change in NCWC -150,000,000
EBIT 843,000,000
Tax Provision 187,000,000
Depreciation and Amortization 209,000,000
Capital Expenditure -184,000,000
Unlevered Free Cash Flow 489,534,782

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