Novo Nordisk (NVO) AI Stock Analysis

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Novo Nordisk

(NYSE:NVO)

Rating:80Outperform

Price Target:

$77.00

▲(9.31%Upside)

Novo Nordisk's strong financial performance and positive earnings call significantly bolster its stock score. The company's efficient operations, solid growth, and strategic initiatives are key strengths. Technical analysis suggests a cautious outlook with mixed trends, while valuation appears fair in the current market. Despite some challenges, the overall prospects remain robust.

Positive Factors

Market Share Capture

The partnership with Hims & Hers is expected to capture more market share by reducing the impact of compounded products.

Partnership Expansion

Broader expansion of NovoCare partnerships with companies like LifeMD and Ro further help Novo draw level with Lilly's DTC channels.

Negative Factors

CEO Transition Challenges

Announced departure of Novo CEO highlights ongoing competitive pressures that have challenged shares of late.

Competitive Pressures

Competitive pressures from Lilly, headwinds from compounders, and what could amount to a modest benefit from its exclusive deal with select Caremark formularies leaves Novo's incretin franchise in an increasingly more challenged position.

Market Competitiveness

Lilly's Mounjaro and Zepbound are projected to continue taking market share from Novo Nordisk's products like Ozempic and Wegovy.

Novo Nordisk (NVO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$300.47B

Dividend Yield1.75%

Average Volume (3M)11.41M

Price to Earnings (P/E)19.9

Beta (1Y)0.86

Revenue Growth22.74%

EPS Growth16.36%

CountryUS

Employees77,406

SectorHealthcare

Sector Strength40

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)0.99

Shares Outstanding3,390,128,000

10 Day Avg. Volume11,331,765

30 Day Avg. Volume11,408,361

Financial Highlights & Ratios

PEG Ratio3.15

Price to Book (P/B)14.82

Price to Sales (P/S)0.00

P/FCF Ratio29.96

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$92.35

Price Target Upside31.10% Upside

Rating ConsensusHold

Number of Analyst Covering9

Novo Nordisk Business Overview & Revenue Model

Company DescriptionNovo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products in Europe, the Middle East, Africa, Mainland China, Hong Kong, Taiwan, North America, and internationally. It operates in two segments, Diabetes and Obesity Care, and Rare Disease. The Diabetes and Obesity care segment provides products for diabetes, obesity, cardiovascular, and other emerging therapy areas. The Rare Disease segment offers products in the areas of rare blood disorders, rare endocrine disorders, and hormone replacement therapy. The company also provides insulin pens, growth hormone pens, and injection needles. In addition, it offers smart solutions for diabetes treatment, such as smart insulin pens and Dose Check, an insulin dose guidance application. The company has a collaboration agreement with UNICEF to tackle childhood obesity; and with Valo Health, Inc. to discover and develop novel drug programmes for cardiometabolic space. Novo Nordisk A/S was founded in 1923 and is headquartered in Bagsvaerd, Denmark.

How the Company Makes MoneyNovo Nordisk generates revenue primarily through the sale of its pharmaceutical products. The company's largest revenue stream comes from its diabetes care segment, where it sells a range of insulin products and GLP-1 receptor agonists. These products are critical for the management of diabetes, a condition that affects millions globally. Additionally, Novo Nordisk's revenue is bolstered by its obesity care products, which address the growing global challenge of obesity. The company's hemophilia and growth hormone therapies further contribute to its income. Significant partnerships with healthcare providers and governments, as well as extensive research and development investments, play crucial roles in Novo Nordisk's ability to innovate and maintain its market position. Strategic collaborations with other pharmaceutical companies and research institutions also enhance its product offerings and market reach.

Novo Nordisk Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Breaks down revenue by business segments, highlighting which areas are driving growth and where the company might face challenges or opportunities.

Chart InsightsNovo Nordisk's diabetes segment shows robust growth, but recent fluctuations suggest potential volatility, possibly due to supply constraints. The obesity segment is experiencing explosive growth, driven by increased demand for GLP-1 products, despite challenges in the U.S. market. The rare disease segment remains stable, with modest growth. The earnings call highlights strong sales and profit growth, but also notes challenges with compounded GLP-1 drugs and increased carbon emissions. Despite a reduced full-year outlook, Novo Nordisk's strategic focus on expanding access and regulatory milestones could sustain momentum.

Data provided by:

Main Street Data

Novo Nordisk Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 6.26%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong sales and profit growth, increased patient reach, and significant regulatory milestones. However, challenges with compounded GLP-1 drugs in the U.S., increased carbon emissions, and a reduced full-year outlook due to lower-than-planned penetration of branded GLP-1 treatments were notable lowlights.

Q1-2025 Updates

Positive Updates

Strong Sales and Operating Profit Growth

Novo Nordisk reported an 18% sales growth and a 20% operating profit growth for the first 3 months of 2025.

Increased Patient Reach

Serving nearly 46 million patients with diabetes and obesity treatments, an increase of almost 4 million compared to the first 3 months of 2024.

Wegovy Prescription Growth

Wegovy sales increased by 39% in U.S. operations in the first 3 months of 2025, driven by increased volumes.

Regulatory Milestones

The FDA accepted the application for Wegovy 2.4 mg for metabolic dysfunctional associated steatohepatitis with priority review, and the new drug application for oral Semaglutide 25 mg was submitted.

International Growth

Sales in International Operations grew by 19%, driven by GLP-1 products with Obesity care sales growing by 137%.

Negative Updates

Challenges with Compounded GLP-1

Significant impact on Wegovy market share due to the compounded GLP-1 market in the U.S., with a need to transition patients to branded treatments.

Carbon Emissions Increase

Total carbon emissions rose by 37% compared to the first 3 months of 2024, mainly due to acquisition of new production sites and expansion activities.

Reduced Full-Year Outlook

Reduced full-year outlook due to lower-than-planned branded GLP-1 penetration impacted by the rapid expansion of compounding in the U.S.

Supply Constraints Impact

GLP-1 diabetes sales growth negatively impacted by periodic supply constraints in International Operations.

Company Guidance

During the Q1 2025 earnings call, Novo Nordisk highlighted several key metrics and strategic updates. The company reported an 18% increase in sales and a 20% growth in operating profit for the first three months of 2025. Novo Nordisk now serves nearly 46 million patients with its diabetes and obesity treatments, marking an increase of almost 4 million from the same period in 2024. However, total carbon emissions rose by 37%, primarily due to the acquisition of new production sites and expanded manufacturing capabilities. In terms of diversity, women now hold 42% of senior leadership positions, up from 41% the previous year. The company completed its pivotal REDEFINE 2 trial for CagriSema and is on track to submit for approval in the first quarter of 2026. Despite reducing the full-year outlook due to slower-than-anticipated GLP-1 uptake in the U.S., Novo Nordisk remains committed to expanding access through partnerships and initiatives with pharmacies and telehealth services. Sales in the U.S. grew by 17% while international operations saw a 19% increase, with obesity care sales growing 65% overall. The company is also closely monitoring potential U.S. tariffs but noted that current ones do not materially affect their 2025 financial outlook.

Novo Nordisk Financial Statement Overview

Summary

Novo Nordisk has demonstrated exceptional financial performance with strong revenue growth and high profitability margins. The income statement shows significant revenue growth and efficient cost management. The balance sheet indicates solid financial stability with a strong capital base, though debt levels require monitoring. Cash flows remain strong despite a slight decline in free cash flow.

Income Statement

Very Positive

Novo Nordisk's income statement reflects robust growth and profitability. The company achieved significant revenue growth with a 25.05% increase from 2023 to 2024, showcasing strong market performance. Gross profit margin remained high at 84.68%, indicating effective cost management. The net profit margin of 34.77% underscores healthy bottom-line profitability. Additionally, EBIT and EBITDA margins are strong at 44.19% and 50.94% respectively, highlighting efficient operations and solid earnings before tax and non-cash expenses.

Balance Sheet

Very Positive

The balance sheet of Novo Nordisk demonstrates financial stability with a good equity ratio of 30.80%, indicating a solid capital base relative to total assets. The debt-to-equity ratio stands at 0.72, showing a moderate level of leverage that is manageable. Return on equity is impressive at 70.37%, reflecting strong earnings generated from shareholders' equity. These metrics indicate a well-capitalized company with effective use of debt and equity, though the increasing total debt warrants monitoring.

Cash Flow

Very Positive

Novo Nordisk's cash flow statement shows a positive trajectory with a free cash flow growth rate of -0.50% from 2023 to 2024, remaining relatively stable. The operating cash flow to net income ratio is 1.20, suggesting robust cash generation from operations relative to net income. The free cash flow to net income ratio is 0.69, indicating a substantial portion of earnings is converted into free cash flow. Overall, the company displays strong cash flow resilience, although capital expenditures have impacted free cash flow slightly.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
290.40B	232.26B	176.95B	140.80B	126.95B
	Gross Profit
245.88B	196.50B	148.51B	117.14B	106.01B
	EBIT
128.34B	102.57B	74.81B	58.64B	54.13B
	EBITDA
137.38B	113.33B	76.41B	64.83B	58.56B
	Net Income Common Stockholders
100.99B	83.68B	55.52B	47.76B	42.14B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
26.31B	30.23B	23.57B	17.48B	12.76B
	Total Assets
465.80B	314.49B	241.26B	194.51B	144.92B
	Total Debt
102.79B	27.01B	25.78B	26.64B	10.36B
	Net Debt
87.13B	12.61B	13.13B	15.93B	-2.40B
	Total Liabilities
322.31B	207.93B	157.77B	123.76B	81.60B
	Stockholders Equity
143.49B	106.56B	83.49B	70.75B	63.33B
Cash Flow		Free Cash Flow
69.66B	70.01B	64.13B	47.62B	29.87B
	Operating Cash Flow
120.97B	108.91B	78.89B	55.00B	51.95B
	Investing Cash Flow
-128.90B	-43.89B	-24.92B	-31.61B	-22.44B
	Financing Cash Flow
8.73B	-63.16B	-51.80B	-25.49B	-32.24B

Novo Nordisk Technical Analysis

Technical Analysis Sentiment

Positive

Last Price70.44

Price Trends

50DMA

67.10

Positive

100DMA

75.23

Negative

200DMA

95.61

Negative

Market Momentum

MACD

0.48

Negative

RSI

58.46

Neutral

STOCH

74.75

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVO, the sentiment is Positive. The current price of 70.44 is above the 20-day moving average (MA) of 66.87, above the 50-day MA of 67.10, and below the 200-day MA of 95.61, indicating a neutral trend. The MACD of 0.48 indicates Negative momentum. The RSI at 58.46 is Neutral, neither overbought nor oversold. The STOCH value of 74.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NVO.

Novo Nordisk Risk Analysis

Novo Nordisk disclosed 17 risk factors in its most recent earnings report. Novo Nordisk reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Novo Nordisk Peers Comparison

Overall Rating

UnderperformOutperform

Sector (53)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVO	80 Outperform	$300.47B	19.93	87.53%	1.75%	22.74%	16.36%
AZN	77 Outperform	$219.66B	28.08	19.81%	2.16%	15.48%	22.70%
MRK	76 Outperform	$194.81B	11.29	39.31%	4.07%	4.40%	654.93%
LLY	72 Outperform	$676.41B	59.12	77.73%	0.76%	36.38%	80.73%
SNY	71 Outperform	$128.05B	21.63	7.34%	2.84%	-4.57%	2.96%
ABBV	67 Neutral	$323.71B	78.14	88.15%	3.48%	5.45%	-30.21%
Sector *	53 Neutral	$5.14B	3.23	-45.01%	2.85%	17.55%	-0.69%

* Healthcare Sector Average

Performance Comparison

NVO

Novo Nordisk

67.35

-64.86

-49.06%

AZN

AstraZeneca

70.96

-4.15

-5.53%

LLY

Eli Lilly & Co

725.22

-77.15

-9.62%

MRK

Merck & Company

77.59

-44.87

-36.64%

SNY

Sanofi

52.39

5.93

12.76%

ABBV

AbbVie

185.72

35.83

23.90%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.