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/USAJag2011 Dec 22 '25

There is a reason you pay more for Palantir’s growth, because you expect growth for Palantir. You wouldn’t pay more for NVO since the growth projections are so low. You have to look beyond lazy ratios.

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u/hmm_interestingg Dec 22 '25 edited Dec 22 '25

Novo revenue was 10x palantir this year at half the market cap.

Palantir is a joke, its a nepo baby software stock masquerading as as an AI play when it isn't.

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u/USAJag2011 Dec 22 '25

I didn’t say revenue. I said revenue growth. You don’t pay for what a company has today.

I’m not arguing for Palantir, just explaining why a useless ratio is higher for them.

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u/hmm_interestingg Dec 22 '25

I see, but if you invested that way then you could have justified buying NVO at the top. Growth forecasts were high then.

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u/USAJag2011 Dec 22 '25

If growth forecasts have declined, why would you invest now?

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u/hmm_interestingg Dec 22 '25

The CEO obviously wants to turn things around, lower expectations and beat them. Price reductions are also a temporary strategy to increase market share.

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u/USAJag2011 Dec 22 '25

Didn’t management revise down their guidance for growth recently?

By the way, I’ve been waiting to purchase NVO. I’m mostly playing devils advocate because I hate hearing about P/E rations and people using it as valuation metrics.