Despite a steep 65% drop from its all-time high of 145.99 a share in the prior 12 months, Novo Nordisk remains one of the most operationally sound businesses on the planet. As an investor, you are getting exposure to the booming GLP-1 drug market and the stable, cash-rich insulin and diabetes care business, serving a patient base that literally depends on these treatments with their lives. Novo’s execution is reflected clearly in its financials and with a deeper look into the fundamentals, the conclusion is obvious: the stock is trading well below its intrinsic value. The most recent guidance update on 7/29 is nowhere near as dire as the market is reacting, 8-14% earnings growth is actually rather good for a company at such valuations.

Based on a discounted cash flow (DCF) model with extremely conservative assumptions we can see that assuming these undemanding earnings targets can be met, the stock is significantly undervalued. With EPS derived from recent reporting: EPS TTM 3.37, EPS MRQ .92 imputing future quarters estimates and guidance, this would arrive at a estimate for the 2025 calendar year of 3.72 earnings per share (in line with major investment bank analysts):

Earnings Available to Shareholders (2025): USD 3.72/share

Short-term growth rate (5 years): 3%

Long-term growth rate: 3%

Discount rate: 7%

These are deliberately sandbagged inputs, Novo’s actual operational growth over the past 5+ years has supported growth much higher than 3% and projections/guidance (As of 7/29 Novo Nordisk updated EPS guidance to mid range of ~10%) are much higher. Even with these cautious numbers, the discounted cash flow ascribes an downside case- intrinsic value of USD 83 per share, and with a current price of 68 a share, this implies a greater than 22% upside along with a significant margin of safety given how conservative the model inputs are.

With a bear case and essentially no idiosyncratic growth, the company is still well below its intrinsic value, when utilizing more realistic model inputs for a discounted cash flow, the pricing divergence is even more extreme. The Gurufocus fair value (a DCF using earnings growth reflective of reality, rather than a bear case) has the intrinsic value at 144, which albeit a bull case, does not seem out of line with execution as recent earnings have been comparably strong (even if the share price is not reflecting this) with MRQ revenue coming in a +20% year over year, and earnings +15%. These earnings numbers are clearly positive and reflective of a company executing in a growing market rather than a bearish/declining operation.

The price to earnings is exceptionally compressed for the exposure Novo Nordisk offers, its largest competitor Eli Lilly trades at a massive premium with a multiple 64x trailing earnings, and both have comparable market share in the mid ~40% range. While LLY absolutely deserves a premium due to the wildly profitable GLP-1 market, NVO trades at such an extreme discount with similar operations and collectively similar exposure, (42b revenue NVO vs 49b revenue LLY) the value becomes clear. This is not a market where one company/monopoly is the only beneficiary of diabetic and obesity treatments (as LLY is priced to reflect), the reality is much more balanced between the two firms.

Based on a conservative suite of numbers reflecting essentially no growth beyond inflation, it is clear that the the company makes far more money than the market is giving the company credit for and the risk and return profile is heavily skewed to the upside.

Despite dominating the fast-growing GLP-1 drug class and beating expectations for years, the market’s pricing seems to be stuck in a “buy the hype, sell the reality” cycle. The recent dip following CagriSema’s Phase 3 trial update is a textbook case. Expectations were set sky high, and decent results resulted in a major decline in market cap. But if you zoom out from the short-term narrative games, the fundamentals look extremely strong and the stock still looks cheap.

CagriSema is Novo’s next-generation combination therapy, combining semaglutide (from Wegovy/Ozempic fame), with a longer acting amylin analogue. The goal is improved glycemic control and superior weight loss in one injection. Phase 3 results delivered what they were supposed to: meaningful, sustained weight loss and glucose reductions even if not as effective as hype would suggest.

The market’s muted response wasn’t due to weak data fundamentally, it was due to a sell-the news mentality after a wave of anticipation. But the drug has huge potential, especially for patients who don’t respond as well to semaglutide alone or who struggle with injectable compliance. Commercially, CagriSema could extend the lifecycle of Novo’s GLP-1 franchise and further entrench its position in obesity and diabetes care. Also regardless of what markets would like to think, advertising and marketing do have an impact on utilization, this is an area where Novo Nordisk also excels.

This isn’t a binary biotech moonshot this is incremental product evolution from a company already generating billions in profit off GLP-1s.

Novo didn’t just ride the GLP-1 wave it outright created it. From Victoza to Ozempic and now Wegovy, the Danish giant has steadily refined this drug class over more than a decade. GLP-1s improve insulin secretion, suppress appetite, and now seem to offer benefits in areas as varied as cardiovascular health and potentially even Alzheimer’s.

Competitors like Eli Lilly have elbowed into the space with its alternative Mounjaro, but Novo’s pipeline and manufacturing scale are still competitive. The company is vertically integrated, disciplined, and ruthlessly consistent, the company has executed on 20 years of straight revenue growth, with only two quarters of decline, the company has an incredible operational history regardless of how the market is treating its equity.

Novo Nordisk Revenue History: Exceptional Consistency

*MacroTrends. (n.d.). Novo Nordisk revenue chart

Novo Nordisk’s capital return program is as clean as it gets. The company has been repurchasing shares aggressively recently completing $3.5 billion USD in buybacks and its share count has been consistently declining. The share repurchase graph looks exactly as you would want as an investor: smooth, down and to the right (Given recent share declines I would estimate an acceleration in buybacks due to higher value-cost ongoing).

*NVO Shares Outstanding Macrotrends

This isn’t just cosmetic. With Novo generating strong free cash flow and little need for outside capital, each year’s buyback ratchets up per-share earnings, dividends, and long-term compounding (I would expect an additional buyback authorization in the interim given share declines as well)

Earnings history has also been a showcase in consistency. The firm rarely surprises, because it doesn’t have to. Novo just executes. In a world where drug pipelines are often full of maybe someday assets, Novo lives in the now.

Novo Nordisk Earnings Per Share History:

*MacroTrends. (n.d.). Novo Nordisk EPS chart

The global diabetes and obesity crisis isn’t slowing down. If anything, it’s accelerating especially in middle-income countries now catching up to Western lifestyles along with aging populations in developed countries. That means more demand, more patients, more prescriptions.

At the same time, GLP-1s are expanding from strictly diabetes indications to broader metabolic health and obesity. This is an astonishingly massive TAM estimated to be 100+ Billion by 2030, and Novo is front and center. Insurance reimbursement is expanding. Social stigma around weight loss medications is decreasing.

And crucially: this is a class of drugs people stay on. GLP-1s aren’t one-and-done pills, they’re long-term regimens. That means recurring revenue, pricing power, and huge switching costs.

Heavy Exposure to the U.S. Market: A substantial portion of Novo’s revenue is generated from the United States, making the company vulnerable to regulatory shifts, pricing pressures, or changes in reimbursement policy from insurers or government programs like Medicare.

GLP-1 Competition and Pricing Pressure: While Novo leads the GLP-1 space based on market share, competitors like Eli Lilly are gaining ground. Increased competition could compress pricing power or require higher R&D and marketing spend to defend market share.

Novo Nordisk is a fortress. It has a world-class pipeline, dominant GLP-1 market share, secular growth trends in its favor, and a pristine capital return program. Yet it trades like a company with flatlined growth and looming competition risk.

CagriSema’s lukewarm market reaction looks more like short-term irrationality than a reflection of long-term value. Meanwhile, even using lowball assumptions, Novo screens cheap by nearly any financial metric. With a strong history of execution, upside optionality in pipeline innovation, and an ever-expanding TAM, this is the kind of stock you quietly buy, hold, and forget.

And right now, it’s on sale

This article first appeared on GuruFocus.