Novo Nordisk A/S (NVO): A Bull Case Theory

We came across a bullish thesis on Novo Nordisk A/S on Valueinvesting subreddit by Menu-Quirky. In this article, we will summarize the bulls’ thesis on NVO. Novo Nordisk A/S's share was trading at $50.03 as of July 30^th. NVO’s trailing and forward P/E were 13.71 and 12.39, respectively according to Yahoo Finance.

Novo Nordisk presents a compelling case of a high-quality growth company temporarily priced like a value stock. Following a sharp price correction and a downward revision in its earnings outlook, the company now trades at a forward P/E of 13.09—less than half its 5-year average above 30—positioning it well below historical and sector valuation levels.

While its price-to-sales (5.05) and price-to-book (11.06) ratios remain elevated by classic value standards, the sharp contraction in its earnings multiple and declines in EV/EBITDA (10.39) and P/FCF (18.33) have drawn interest from valuation-focused investors. Wall Street analysts note that the stock trades near 52-week lows, with its valuation screens signaling “undervalued” status relative to its own historical norms and broader industry peers.

However, Novo is not a traditional deep-value play; its high ROE (over 88%) and premium P/B ratio point to strong capital efficiency and durable fundamentals more typical of a temporarily out-of-favor growth leader. Recent market caution stems from increased competition and a lowered growth outlook, which has dampened sentiment.

Still, for investors willing to look through the near-term uncertainty, Novo Nordisk offers an attractive entry point. The current setup resembles a contrarian opportunity, where a quality compounder trades at a valuation typically reserved for more cyclical or distressed names.

For value-oriented investors who can tolerate short-term volatility, this dislocation offers potential for meaningful upside if sentiment and growth expectations normalize. As such, Novo Nordisk stands out as a rare large-cap opportunity with strong fundamentals at depressed valuation multiples.

Previously, we covered a bullish thesis on Novo Nordisk A/S by Kontra Investments in May 2025, which highlighted the company’s strong Q1 performance, global GLP-1 dominance, and long-term growth drivers. The company’s stock price has depreciated by approximately 26% since our coverage. This is because valuation multiples have compressed. The thesis still stands as Novo’s fundamentals remain robust. Menu-Quirky shares a similar view but emphasizes the stock’s current undervaluation and appeal to value-focused investors.

Novo Nordisk A/S is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held NVO at the end of the first quarter which was 64 in the previous quarter. While we acknowledge the potential of NVO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.