Novo Nordisk (NVO) AI Stock Analysis

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Novo Nordisk

(NYSE:NVO)

Rating:79Outperform

Price Target:

$86.00

▲(7.73%Upside)

Novo Nordisk's strong financial performance, evidenced by impressive profitability and cash flow, is the primary driver of its stock score. The earnings call further supports this with robust sales and strategic growth initiatives, despite challenges in the U.S. market. Technical analysis indicates short-term momentum, although long-term trends suggest caution. Valuation metrics point to potential overvaluation, slightly tempering the overall score.

Positive Factors

Direct-to-Consumer Expansion

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

Market Strategy

Expansion into the DTC space will continue to help Novo combat the sale of compounded agents following the removal of semaglutide from the FDA shortage list.

Partnerships

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

Negative Factors

CEO Transition

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 Share Loss

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

$354.89B

Dividend Yield2.75%

Average Volume (3M)10.26M

Price to Earnings (P/E)23.6

Beta (1Y)0.89

Revenue Growth22.74%

EPS Growth16.36%

CountryUS

Employees77,406

SectorHealthcare

Sector Strength58

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)0.99

Shares Outstanding3,390,128,000

10 Day Avg. Volume9,842,096

30 Day Avg. Volume10,257,530

Financial Highlights & Ratios

PEG Ratio2.14

Price to Book (P/B)25.50

Price to Sales (P/S)0.00

P/FCF Ratio33.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$92.78

Price Target Upside16.22% Upside

Rating ConsensusHold

Number of Analyst Covering8

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
Details revenue from various business segments, providing insight into Novo Nordisk's diverse income streams and strategic focus areas.

Chart InsightsNovo Nordisk's diabetes revenue shows steady growth, but obesity treatment sales are surging, reflecting a strategic focus on this segment. The latest earnings call highlights a 65% growth in obesity care sales, driven by increased patient reach and international expansion. However, challenges with compounded GLP-1 drugs in the U.S. and a reduced full-year outlook due to slower uptake of branded treatments pose risks. Despite these challenges, the company's commitment to expanding access and achieving regulatory milestones indicates potential for sustained growth.

Data provided by:

Main Street Data

Novo Nordisk Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 20.43%|

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 exhibits strong financial health with high profitability margins and robust cash flow generation. The company shows consistent revenue and profit growth, underpinned by efficient operations and strategic cash management. The balance sheet is solid, though there is room for improvement in the equity base.

Income Statement

Very Positive

Novo Nordisk has demonstrated strong income statement performance with consistent revenue growth, evidenced by a TTM revenue increase of 4.39% compared to the previous annual period. Gross profit margin stands at a robust 84.34%, while the net profit margin is impressive at 34.51%. EBIT margin is 44.52% and EBITDA margin is 50.82%, indicating highly efficient operations and profitability.

Balance Sheet

Very Positive

The balance sheet of Novo Nordisk shows a solid financial position with a debt-to-equity ratio of 0.86, reflecting manageable leverage. The return on equity (ROE) is strong at 75.53%, highlighting effective use of shareholders' funds. With an equity ratio of 28.32%, the company maintains a balanced capital structure, though there is room to improve equity financing.

Cash Flow

Very Positive

Novo Nordisk's cash flow performance is robust, with a TTM free cash flow growth rate of 7.29%. The operating cash flow to net income ratio is 1.25, suggesting strong cash generation relative to profits. Free cash flow to net income ratio is 0.71, indicating effective conversion of earnings to free cash flow for reinvestment or distribution.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
303.14B	290.40B	232.26B	176.95B	140.80B	126.95B
	Gross Profit
255.65B	245.88B	196.50B	148.51B	117.14B	106.01B
	EBIT
134.98B	128.34B	102.57B	74.81B	58.64B	54.13B
	EBITDA
154.08B	137.38B	113.33B	76.41B	64.83B	58.56B
	Net Income Common Stockholders
104.61B	100.99B	83.68B	55.52B	47.76B	42.14B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
41.55B	26.31B	30.23B	23.57B	17.48B	12.76B
	Total Assets
489.16B	465.80B	314.49B	241.26B	194.51B	144.92B
	Total Debt
118.72B	102.79B	27.01B	25.78B	26.64B	10.36B
	Net Debt
79.78B	87.13B	12.61B	13.13B	15.93B	-2.40B
	Total Liabilities
350.62B	322.31B	207.93B	157.77B	123.76B	81.60B
	Stockholders Equity
138.54B	143.49B	106.56B	83.49B	70.75B	63.33B
Cash Flow		Free Cash Flow
74.74B	69.66B	70.01B	64.13B	47.62B	29.87B
	Operating Cash Flow
131.25B	120.97B	108.91B	78.89B	55.00B	51.95B
	Investing Cash Flow
-139.52B	-128.90B	-43.89B	-24.92B	-31.61B	-22.44B
	Financing Cash Flow
40.57B	8.73B	-63.16B	-51.80B	-25.49B	-32.24B

Novo Nordisk Technical Analysis

Technical Analysis Sentiment

Positive

Last Price79.83

Price Trends

50DMA

67.38

Positive

100DMA

74.10

Positive

200DMA

91.82

Negative

Market Momentum

MACD

3.28

Negative

RSI

68.34

Neutral

STOCH

89.70

Negative

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 79.83 is above the 20-day moving average (MA) of 72.04, above the 50-day MA of 67.38, and below the 200-day MA of 91.82, indicating a neutral trend. The MACD of 3.28 indicates Negative momentum. The RSI at 68.34 is Neutral, neither overbought nor oversold. The STOCH value of 89.70 is Negative, 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 (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVO	79 Outperform	$354.89B	23.63	87.53%	2.75%	22.74%	16.36%
AZN	77 Outperform	$230.93B	29.68	19.81%	2.82%	15.48%	22.70%
MRK	76 Outperform	$205.18B	11.90	39.31%	3.96%	4.40%	654.93%
LLY	71 Outperform	$776.54B	67.88	77.73%	0.73%	36.38%	80.73%
SNY	67 Neutral	$122.32B	20.67	7.34%	4.45%	-4.57%	2.96%
ABBV	67 Neutral	$337.52B	81.48	88.15%	3.43%	5.45%	-30.21%
Sector *	54 Neutral	$5.37B	3.26	-45.10%	3.30%	16.81%	0.02%

* Healthcare Sector Average

Performance Comparison

NVO

Novo Nordisk

79.83

-58.58

-42.32%

AZN

AstraZeneca

74.42

-3.33

-4.28%

LLY

Eli Lilly & Co

819.36

-59.63

-6.78%

MRK

Merck & Company

81.71

-42.86

-34.41%

SNY

Sanofi

49.67

3.84

8.38%

ABBV

AbbVie

191.08

27.35

16.70%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.