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Novo Nordisk (NVO)
NYSE:NVO
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Novo Nordisk
(NYSE:NVO)
81Outperform
Positive Factors
Pharmacy and Distribution Strategy
Novo has now established NovoCare Pharmacy enabling the company to directly ship Wegovy at all doses to patients at a discounted price.
Negative Factors
Clinical Study Results
Today's results from Novo's REDEFINE-2 study likely underperform investors expectations from a weightloss perspective.
Market Differentiation
REDEFINE-2 misses an opportunity to differentiate in the obesity and diabetes market.
Novo Nordisk (NVO) vs. S&P 500 (SPY)
Market Cap
$344.37B
Dividend Yield1.3%
Average Volume (3M)8.17M
Price to Earnings (P/E)24.0
Beta (1Y)0.69
Revenue Growth24.91%
EPS Growth21.42%
CountryUS
Employees77,349
SectorHealthcare
Sector Strength78
IndustryBiotechnology
Share Statistics
EPS (TTM)3.29
Shares Outstanding3,390,128,000
10 Day Avg. Volume6,906,739
30 Day Avg. Volume8,165,593
Financial Highlights & Ratios
PEG Ratio1.12
Price to Book (P/B)N/A
Price to Sales (P/S)10.92
Price to Cash Flow (P/CF)66.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$108.00Price Target Upside38.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Novo Nordisk Business Overview & Revenue Model
Company DescriptionNovo Nordisk A/S is a Denmark-based healthcare company, which manufactures and markets pharmaceutical products globally. The company operates through two segments, including Diabetes & Obesity Care, and Biopharmaceuticals. The company was founded in 1925.
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 Financial Statement Overview
Summary
Novo Nordisk has demonstrated exceptional financial performance across its income statement, balance sheet, and cash flow statement. The company exhibits strong revenue growth, high profitability margins, and solid financial stability with effective capital management. Despite a slight decline in free cash flow, overall cash flow generation remains healthy. The company's well-balanced financial structure and efficient operations position it favorably within the biotechnology industry, highlighting both strength and sustainability.Income Statement
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.95
Very Positive
Balance Sheet
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.92
Very Positive
Cash Flow
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.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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 |
| 147.94B | 113.33B | 82.04B | 65.39B | 59.27B | 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
Negative
78.11
Price Trends
84.98
Negative
96.49
Negative
114.89
Negative
Market Momentum
-0.64
Positive
36.06
Neutral
7.82
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVO, the sentiment is Negative. The current price of 78.11 is below the 20-day moving average (MA) of 85.54, below the 50-day MA of 84.98, and below the 200-day MA of 114.89, indicating a bearish trend. The MACD of -0.64 indicates Positive momentum. The RSI at 36.06 is Neutral, neither overbought nor oversold. The STOCH value of 7.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $344.37B | 24.01 | 82.03% | 1.30% | 24.91% | 21.42% | |
80 Outperform | $214.59B | 19.52 | 26.33% | 2.77% | 1.08% | -17.73% | |
79 Outperform | $147.04B | 24.70 | 7.34% | 2.49% | -4.57% | 2.96% | |
72 Outperform | $147.29B | 18.91 | 9.05% | 6.34% | 8.77% | 272.80% | |
71 Outperform | $239.29B | 14.14 | 40.81% | 3.28% | 6.85% | 4577.79% | |
65 Neutral | $781.20B | 70.84 | 84.84% | 0.65% | 32.00% | 102.18% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% |
* Healthcare Sector Average
Performance Comparison
NVO
Novo Nordisk
78.11
-54.35
-41.03%
LLY
Eli Lilly & Co
824.06
71.11
9.44%
MRK
Merck & Company
94.73
-24.18
-20.33%
NVS
Novartis
111.35
12.35
12.47%
PFE
Pfizer
25.99
-0.57
-2.15%
SNY
Sanofi
58.74
11.92
25.46%
Novo Nordisk Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -5.46% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflects strong financial performance and strategic growth in key areas such as GLP-1 treatments and obesity care, supported by significant R&D achievements. However, challenges remain with increased carbon emissions, supply constraints, and issues in the rare diseases segment. Despite these challenges, the positive developments in sales, profit, and R&D outcomes suggest more highlights than lowlights.Highlights
Strong Sales and Profit Growth
Novo Nordisk reported a 24% sales growth and 22% operating profit growth in the first 9 months of 2024, driven by both North America Operations and International Operations.
Expansion of GLP-1 Treatments
The company has tripled its patient reach with GLP-1 treatments over the past three years, now serving around 11.5 million patients globally.
Significant R&D Achievements
Exciting readouts from Phase III trials, including SOUL, STRIDE, and ESSENCE, have shown substantial cardiovascular and kidney risk reductions with semaglutide.
Obesity Care Sales Surge
Obesity care sales increased by 44%, with International Operations showing a 95% increase, driven by the uptake of Wegovy.
Positive Regulatory Developments
Plans to file for regulatory approvals for oral semaglutide and semaglutide 2.4 mg based on successful trial outcomes.
Lowlights
Increased Carbon Emissions
Total carbon emissions rose by 34% compared to the first 9 months of 2023, primarily due to increased capital expenditure.
Challenges in Rare Diseases
Rare Disease sales increased by only 3%, with a 9% decline in International Operations and ongoing issues with Norditropin supply.
Supply Constraints
Sales growth led to periodic supply constraints and drug shortage notifications across several products and geographies.
High R&D Costs
Research and development costs increased by 56%, reflecting increased clinical trial activity and impairment loss related to intangible assets.
Compounded Product Concerns
Issues with compounded products in the U.S. market affecting patient safety and Novo Nordisk's supply visibility.
Company Guidance
In the Novo Nordisk Q3 2024 earnings call, the company provided an optimistic outlook with a narrowed sales growth guidance, expecting a 23% to 27% increase at constant exchange rates. This growth is driven by a 24% sales increase in the first nine months of 2024, with North America Operations growing by 31% and International Operations by 15%. The operating profit is forecasted to grow between 21% and 27% at constant exchange rates. The company's strong performance is attributed to its GLP-1 treatments, with a notable 3x increase in patient reach over the last three years. Novo Nordisk is also focused on expanding its supply chain to meet the high demand, with capital expenditure expected to reach DKK 45 billion in 2024. Additionally, the free cash flow is projected to be between DKK 57 million and DKK 65 billion, reflecting the company's strategic investments and favorable U.S. rebate impacts.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.