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

We came across a bullish thesis on Novo Nordisk A/S on Value investing subreddit by Max-lindberg. In this article, we will summarize the bulls’ thesis on NVO. Novo Nordisk A/S's share was trading at $49.35 as of November 28th. NVO’s trailing and forward P/E were 13.62 and 12.53  respectively according to Yahoo Finance.

Novo Nordisk (NVO), the Danish pharmaceutical leader behind Ozempic and Wegovy, has undergone a dramatic financial transformation driven by surging demand for its GLP-1 diabetes and obesity treatments. Over the past five years, revenue has more than doubled to $45.3B, with gross profit and net income expanding at similar rates, reflecting exceptional operating leverage. Margins have strengthened despite scale, as net profit margin rose from 33.19% to 34.78%. EBIT grew sharply to $20.1B, supported by improved efficiency and disciplined cost control.

This profitability surge has occurred alongside a massive expansion of the balance sheet, with total assets climbing to $72.7B due to heavy investment in manufacturing capacity and acquisitions. However, total debt increased over twelvefold to $15.2B, shifting NVO from a net cash to a leveraged position. While retained earnings more than doubled and share count declined by nearly 5%, liquidity weakened and ROA and ROCE fell due to asset growth outpacing earnings. Cash flow remains strong, with operating cash flow of $18.9B comfortably funding rising capex tied to semaglutide production.

Profitability ratios remain world-class, and despite declines in asset turnover and interest coverage, the company’s financial profile is solid. A DCF valuation using conservative assumptions yields a base-case intrinsic value of $63.70 per share, with upside to $134 in bullish scenarios and downside to $24 in recession conditions. With a projected 17% upside, NVO appears modestly undervalued if GLP-1 momentum continues. Still, investors must weigh risks from competition, regulatory pressure, and potential erosion as the company scales into its next phase of growth.

Previously we covered a bullish thesis on Novo Nordisk A/S by Kontra Investments in May 2025, which highlighted the company’s GLP-1 dominance, strong Q1 results, and expanding global demand. The company's stock price has depreciated approximately by 27.14% since our coverage. This is because the thesis didn’t play out as sentiment weakened. The thesis still stands as fundamentals remain strong. Max-lindberg shares a similar view but emphasizes valuation and long-term financial momentum.

Novo Nordisk A/S is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held NVO at the end of the second quarter which was 60 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.