While growth is established for NYSE:NVO, the stock's valuation remains reasonable.

Consider NOVO-NORDISK A/S-SPONS ADR (NYSE:NVO) as an affordable growth stock, identified by our stock screening tool. NYSE:NVO is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

Growth Analysis for NYSE:NVO

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:NVO, the assigned 7 reflects its growth potential:

• NVO shows a strong growth in Revenue. In the last year, the Revenue has grown by 28.03%.
• Measured over the past years, NVO shows a quite strong growth in Revenue. The Revenue has been growing by 9.64% on average per year.
• Based on estimates for the next years, NVO will show a very strong growth in Earnings Per Share. The EPS will grow by 25.79% on average per year.
• NVO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.65% yearly.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
• When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Looking at the Valuation

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:NVO boasts a 7 out of 10:

• Based on the Price/Earnings ratio, NVO is valued a bit cheaper than 79.43% of the companies in the same industry.
• 80.86% of the companies in the same industry are more expensive than NVO, based on the Price/Forward Earnings ratio.
• NVO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NVO is cheaper than 77.99% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, NVO is valued cheaper than 81.34% of the companies in the same industry.
• NVO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of NVO may justify a higher PE ratio.
• NVO's earnings are expected to grow with 40.31% in the coming years. This may justify a more expensive valuation.

Unpacking NYSE:NVO's Health Rating

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:NVO has received a 7 out of 10:

• An Altman-Z score of 12.20 indicates that NVO is not in any danger for bankruptcy at the moment.
• NVO has a better Altman-Z score (12.20) than 90.43% of its industry peers.
• The Debt to FCF ratio of NVO is 0.38, which is an excellent value as it means it would take NVO, only 0.38 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 0.38, NVO belongs to the top of the industry, outperforming 95.69% of the companies in the same industry.
• A Debt/Equity ratio of 0.21 indicates that NVO is not too dependend on debt financing.
• NVO does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Exploring NYSE:NVO's Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:NVO, the assigned 9 is a significant indicator of profitability:

• With an excellent Return On Assets value of 23.95%, NVO belongs to the best of the industry, outperforming 95.69% of the companies in the same industry.
• NVO has a Return On Equity of 74.32%. This is amongst the best in the industry. NVO outperforms 97.13% of its industry peers.
• NVO's Return On Invested Capital of 55.96% is amongst the best of the industry. NVO outperforms 99.04% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for NVO is significantly above the industry average of 15.23%.
• The last Return On Invested Capital (55.96%) for NVO is above the 3 year average (49.65%), which is a sign of increasing profitability.
• The Profit Margin of NVO (33.40%) is better than 96.65% of its industry peers.
• NVO has a Operating Margin of 42.80%. This is amongst the best in the industry. NVO outperforms 98.56% of its industry peers.
• NVO has a Gross Margin of 84.35%. This is amongst the best in the industry. NVO outperforms 88.04% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Our latest full fundamental report of NVO contains the most current fundamental analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.