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

We came across a bullish thesis on Novo Nordisk A/S on r/Valueinvesting by Quorum_Ataraxia. In this article, we will summarize the bulls’ thesis on NVO. Novo Nordisk A/S's share was trading at $59.43 as of January 30th. NVO’s trailing and forward P/E were 15.80 and 16.18 respectively according to Yahoo Finance.

Novo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products in Europe and internationally. NVO remains a largely underappreciated diabetes company, even as obesity treatments dominate market attention.

While obesity has grown rapidly, diabetes continues to be NVO’s core revenue engine, driving the majority of sales and demonstrating structurally robust growth. The company serves a massive and expanding addressable market, with roughly 425 million people living with diabetes today and projections pointing to 736 million by 2045.

Diabetes care sales have scaled impressively from 102 billion DKK in 2020 to over 206 billion DKK in 2024, maintaining its status as NVO’s largest segment despite the surge in obesity therapy revenue. Even allowing for some overlap where semaglutide prescriptions were used off-label for weight loss, diabetes growth remains significant and underlines the company’s dominant position.

Beyond top-line growth, NVO stands out for its exceptional asset efficiency. The company has consistently delivered mid-to-high-teens to low-20s ROA over multiple cycles, long before the GLP-1 or obesity boom, reflecting operational discipline, manufacturing expertise, and capital allocation rather than temporary product-driven advantages. This ability to scale while generating high returns makes NVO a compounding machine, a rare combination in large-cap pharmaceuticals.

The investment case, therefore, extends beyond the obesity narrative. NVO’s diabetes portfolio continues to grow strongly, and its historically high ROA offers durable profitability and efficiency. Even in a market fixated on the GLP-1 craze, the company’s disciplined execution and dominant diabetes business create a compelling, underrecognized opportunity for long-term investors.

Previously, we covered a bullish thesis on Novo Nordisk A/S (NVO) by Kontra Investments in May 2025, which highlighted strong growth in diabetes and obesity care, robust Q1 results, and high capital returns. NVO’s stock price has depreciated by approximately 12.26% since our coverage due to U.S. market softness and GLP-1 competitive pressures. Quorum_Ataraxia shares a similar view but emphasizes diabetes-led growth and exceptional ROA as underappreciated drivers of long-term value.

Novo Nordisk A/S is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 50 hedge fund portfolios held NVO at the end of the third quarter which was 45 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.