Novo Nordisk (NVO) AI Stock Analysis

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Novo Nordisk

(NYSE:NVO)

82Outperform

Novo Nordisk's strong financial performance, evidenced by excellent profitability and effective cash flow management, significantly boosts its overall score. Despite neutral technical momentum and reasonable valuation, the company's robust earnings growth and strategic regulatory achievements are offset by challenges with compounded drug markets and carbon emissions, keeping the score in the lower 80s.

Positive Factors

Direct-to-Consumer 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

Competitive Position

Novo Nordisk shares are expected to remain less competitive compared to other companies in the cardiometabolic market.

Market Competition

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

Product Challenges

Having no clear answer in the oral market is likely to challenge growth in the end of the decade.

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

Market Cap

$292.11B

Dividend Yield1.83%

Average Volume (3M)11.22M

Price to Earnings (P/E)19.4

Beta (1Y)0.96

Revenue Growth22.74%

EPS Growth16.36%

CountryUS

Employees77,406

SectorHealthcare

Sector Strength39

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)0.99

Shares Outstanding3,390,128,000

10 Day Avg. Volume12,644,528

30 Day Avg. Volume11,221,776

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

$92.09

Price Target Upside42.97% Upside

Rating ConsensusHold

Number of Analyst Covering9

Novo Nordisk Business Overview & Revenue Model

Company DescriptionNovo Nordisk is a global healthcare company based in Denmark, specializing in the development, production, and marketing of pharmaceutical products. The company operates primarily in the sectors of diabetes care, obesity, and rare blood and endocrine disorders. Novo Nordisk is renowned for its innovative insulin therapies and devices, as well as its commitment to improving the lives of people with chronic health conditions.

How the Company Makes MoneyNovo Nordisk makes money primarily through the sale of its pharmaceutical products, which include a wide range of insulin and GLP-1 receptor agonists for diabetes management, as well as treatments for obesity and rare diseases. A significant portion of its revenue comes from diabetes care products, which are distributed globally. The company operates a robust research and development pipeline to continually innovate and expand its product offerings. Novo Nordisk maintains strategic partnerships with healthcare providers and institutions to enhance its market reach and customer engagement. Additionally, the company benefits from its strong global presence, with operations in numerous countries, allowing it to leverage scale and distribution efficiencies.

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 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

Neutral

Last Price64.41

Price Trends

50DMA

68.69

Negative

100DMA

76.67

Negative

200DMA

97.67

Negative

Market Momentum

MACD

-0.45

Negative

RSI

49.69

Neutral

STOCH

22.14

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVO, the sentiment is Neutral. The current price of 64.41 is below the 20-day moving average (MA) of 64.43, below the 50-day MA of 68.69, and below the 200-day MA of 97.67, indicating a neutral trend. The MACD of -0.45 indicates Negative momentum. The RSI at 49.69 is Neutral, neither overbought nor oversold. The STOCH value of 22.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVO	82 Outperform	$292.11B	19.36	87.53%	1.83%	22.74%	16.36%
AZN	78 Outperform	$209.57B	27.01	19.81%	2.24%	15.48%	22.70%
MRK	76 Outperform	$192.42B	11.16	39.31%	4.30%	4.40%	654.93%
LLY	72 Outperform	$707.07B	61.80	77.73%	0.72%	36.38%	80.73%
SNY	70 Outperform	$122.46B	20.79	7.34%	3.00%	-4.57%	2.96%
ABBV	60 Neutral	$332.08B	80.16	88.15%	3.60%	5.45%	-30.21%
Sector *	52 Neutral	$5.14B	3.39	-43.55%	2.83%	16.49%	-0.19%

* Healthcare Sector Average

Performance Comparison

NVO

Novo Nordisk

66.15

-65.03

-49.57%

AZN

AstraZeneca

67.96

-7.56

-10.01%

LLY

Eli Lilly & Co

733.29

-34.16

-4.45%

MRK

Merck & Company

74.80

-52.31

-41.15%

SNY

Sanofi

49.21

1.90

4.02%

ABBV

AbbVie

177.44

18.85

11.89%

Novo Nordisk Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: -2.84%|

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.

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.