Novo Nordisk (NYSE:NVO): Exploring Valuation After Extended Stock Slide

It is not every day that Novo Nordisk (NYSE:NVO) catches eyes for all the wrong reasons, but this week’s slide has certainly prompted investors to pause. The stock dropped by roughly 0.9% in the past day and now sits a staggering 58% below its level a year ago. While there is no single dramatic event driving these shifts, the persistent decline has many wondering whether this signals deeper issues or simply reflects changing market sentiment around the pharmaceutical sector.

Looking at a broader perspective, Novo Nordisk’s performance tells a mixed story. The company has seen annual gains in both revenue and net income, yet its share price continues to drift lower. The stock is down 38% year-to-date and 16% over the past month. Momentum that once drove Novo Nordisk higher appears to be fading, even as the company continues to generate healthy profits and outpaces many peers on a five-year basis.

After such a steady slide, is Novo Nordisk undervalued at current levels, or is the market already accounting for all of its future growth prospects?

Most Popular Narrative: 21.5% Undervalued

The current valuation of Novo Nordisk is considered attractive, with the stock trading well below its fair value according to the narrative by Bejgal. This perspective is based on Novo Nordisk’s leadership in the GLP-1 drug market and its promising growth prospects, especially in obesity and diabetes treatments.

Catalysts: Novo Nordisk has a strong position in the GLP-1 drug market, leading with Ozempic for diabetes and Wegovy for obesity. These products have driven significant growth. There is a growing demand for obesity treatments and Novo Nordisk is well-positioned to capitalize on an expanding market. The incretin market grew 5.5% weekly in early 2025 and reached 1,711,049 prescriptions.

Want to unlock the secret formula behind Novo Nordisk’s “undervalued” status? This narrative centers on blockbuster drug growth, bold margin projections, and financial metrics that stand out in the industry. The real story is what underpins the premium and how future financial expectations set this company apart. Curious what assumptions power such a high fair value? Explore further and discover what is driving this outlook.

Result: Fair Value of $69.18 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, increased competition from rivals such as Eli Lilly and ongoing manufacturing constraints could quickly undermine this optimistic outlook for Novo Nordisk.

Find out about the key risks to this Novo Nordisk narrative.

Another View: What Does Our DCF Model Say?

The SWS DCF model takes a different approach and also points to Novo Nordisk being undervalued right now. While this supports the earlier narrative, the real question is which view truly reflects the company's longer-term potential?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Novo Nordisk for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Novo Nordisk Narrative

If you have a different perspective or prefer to base your views on your own analysis, you can craft a personalized narrative in just minutes. do it your way.

A great starting point for your Novo Nordisk research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

Looking for More Investment Ideas?

Smart investors never settle for just one opportunity. Expand your horizons and strengthen your portfolio by tapping into cutting-edge sectors and niche opportunities. Stay ahead of the curve and make sure you do not miss the trends shaping tomorrow’s markets. There is a world of possibilities waiting for you.

• Uncover the potential in tomorrow’s technology by tracking the innovators behind AI penny stocks as they reshape industries with artificial intelligence breakthroughs.
• Seize opportunities for strong income growth by targeting companies that meet the criteria for dividend stocks with yields > 3%, helping you secure robust yields above 3% alongside capital appreciation.
• Gain an edge in financial markets by seeking out undervalued stocks based on cash flows, where cash flow strength could reveal hidden gems primed for long-term value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com