Gross Margin % is calculated as gross profit divided by its revenue. Zoetis's Gross Profit for the
three
months ended in Dec. 2023 was $1,485 Mil. Zoetis's Revenue for the
three
months ended in Dec. 2023 was $2,213 Mil. Therefore, Zoetis's Gross Margin % for the quarter that ended in Dec. 2023 was 67.10%.
The historical rank and industry rank for Zoetis's Gross Margin % or its related term are showing as below:
ZTS'
s Gross Margin % Range Over the Past 10 Years
Min: 63.53 Med: 67.69 Max: 70.38
Current: 70.03
During the past 13 years, the highestGross Margin % of Zoetis was 70.38%. The lowest was 63.53%. And the median was 67.69%.
ZTS's Gross Margin % is ranked better than 84.24% of 990
companies
in the Drug Manufacturers industry
Industry Median: 46.8
vs ZTS: 70.03
Zoetis had a gross margin of 67.10% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Zoetis was 0.80% per year.
Zoetis Gross Margin % Historical Data
The historical data trend for Zoetis's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Drug Manufacturers - Specialty & Generic subindustry, Zoetis's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Zoetis's Gross Margin % Distribution in the Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Zoetis's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Zoetis's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Zoetis (NYSE:ZTS) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Zoetis had a gross margin of 67.10% for the quarter that ended in Dec. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Zoetis Gross Margin % Related Terms
Thank you for viewing the detailed overview of Zoetis's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Zoetis sells anti-infectives, vaccines, parasiticides, diagnostics, and other health products for animals. The firm earns roughly 35% of total revenue from production animals (cattle, pigs, poultry, and so on), and nearly 65% from companion animal (dogs, horses, cats) products. Its U.S. business is heavily skewed toward companion animals, while its international business is slightly skewed toward production animals. The firm has the largest market share in the industry and was previously Pfizer's animal health unit.
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