What Happened?

Shares of animal health company Zoetis (NYSE:ZTS) fell 10.6% in the morning session after the company reported disappointing fourth-quarter results: its full-year EPS and revenue guidance fell short of Wall Street's estimates. Revenue grew 5% year over year, as weakness in livestock sales, which declined due to the divestiture of certain products, was partly offset by strength in the companion animal segment. Looking ahead, Zoetis expects 6% to 8% organic operational revenue growth, but foreign exchange pressures and ongoing challenges could create headwinds. Overall, this quarter could have been better.

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What The Market Is Telling Us

Zoetis’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Zoetis and indicate this news significantly impacted the market’s perception of the business.

Zoetis is down 0.4% since the beginning of the year, and at $162.02 per share, it is trading 19% below its 52-week high of $199.94 from February 2024. Investors who bought $1,000 worth of Zoetis’s shares 5 years ago would now be looking at an investment worth $1,118.

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