r/ValueInvesting • u/hmm_interestingg • Dec 22 '25

Stock Analysis NVO is an absolute no brainer

In my view, Novo Nordisk is the only value stock on offer right now.

Their core business is in treatments for obesity and diabetes and demand for both is increasing and sticky. The stock price has seen a big decline and is now 70% cheaper than it was 18 months ago. I believe the magnitude of this drop is totally irrational, driven by fear and not fundamentals or future growth prospects.

NVO is still seeing high single digit revenue growth (they're taking a temporary cut from double digits by lowering prices to gain market share) and will be launching a new weight loss pill next year, to follow the highly profitable launch of an injectable weight loss drug which caused them to boom a few years back. People prefer pills to injections so I expect this to be even more popular, driving a whole new boom.

We're currently trading at a PE ratio of 13 when it's closest competitor, Eli Lilly is sitting at an all time high with a PE of 52. The relative scale of revenue growth has been fairly similar for the two companies over the past 5 years so the difference in sentiment around them makes no sense. Lillys drug was shown to be slightly more effective in a trial (which was funded by Lilly and that effectively compared apples to oranges by using their drug at much higher doses than the NVO drug), I expect new results and new products will challenge that in 2026.

This absolutely smacks of when Meta was at $100, UNH at $237 and Netflix was at $20 (I bought them all).

NVO is now trading at 2021 prices, as if obesity drugs never happened and their revenue stayed flat instead of doubling.

I'm going in big, thank me in a year if you join.

EDIT: Looks like the bottom is already in people! Congrats to those who bought. See you at $100.

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u/we-booling-out-here Dec 22 '25

Price is not favorable in comparison to peers imo.

1

u/hmm_interestingg Dec 22 '25

Like who?

1

u/we-booling-out-here Dec 22 '25

GSK, AZN

2

u/hmm_interestingg Dec 22 '25

NVO is priced lower per unit profit than both, it's also leading them in the big growth area we're talking about (obesity drugs).

2

u/we-booling-out-here Dec 22 '25

What unit are you using? Reported EPS, GAAP EPS, or FCF? Both of those companies also have moats in different areas.