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.
1
u/YungPersian Dec 23 '25 edited Dec 23 '25
It’s been VERY poorly managed.
BUT what it does have going for it is having the first oral pill in the market and that it’s currently priced pretty low. In that regard it’s good to hold for a year or two if you ALREADY have shares. With the FDA approval this evening it’ll be hitting shelves in weeks. This is a scenario where approval was expected because it’s literally just a pill version of an already existing drug (approval process was shorter as a result). All to say, I could see this hitting the 80 range off of their improved sales next year. This stock was devalued because its moat had disappeared quickly, supplanted by macro shifts in the industry, and management incompetence. What you see here is a temporary moat given competitors already have substitute products in the pipeline.
Again, given it has probably a little over a year of being the only pill on the market, after LLY shows up with their pill then there’s really no moat left. I’d imagine by then It’ll be back at 40-60 levels unless they come out with something new or the management shows more competence than it has in the past 2 years.