Investors seeking growth at a reasonable cost should explore NYSE:NVO.

Last update: Jan 24, 2024

Here's NOVO-NORDISK A/S-SPONS ADR (NYSE:NVO) for you, a growth stock our stock screener believes is undervalued. NYSE:NVO is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Understanding NYSE:NVO's Growth

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 Earnings Per Share. In the last year, the EPS has been growing by 19.65%, which is quite good.
NVO shows a strong growth in Revenue. In the last year, the Revenue has grown by 28.29%.
NVO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.64% yearly.
The Earnings Per Share is expected to grow by 22.37% on average over the next years. This is a very strong growth
Based on estimates for the next years, NVO will show a quite strong growth in Revenue. The Revenue will grow by 17.51% on average per year.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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.

Valuation Analysis for NYSE:NVO

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:NVO has received a 5 out of 10:

79.31% of the companies in the same industry are more expensive than NVO, based on the Price/Earnings ratio.
Based on the Price/Forward Earnings ratio, NVO is valued a bit cheaper than 78.33% of the companies in the same industry.
Based on the Enterprise Value to EBITDA ratio, NVO is valued a bit cheaper than the industry average as 78.33% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NVO indicates a somewhat cheap valuation: NVO is cheaper than 79.80% of the companies listed in the same industry.
The 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 30.33% in the coming years. This may justify a more expensive valuation.

Health Assessment of NYSE:NVO

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 11.38 indicates that NVO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 11.38, NVO belongs to the top of the industry, outperforming 88.18% of the companies in the same industry.
NVO has a debt to FCF ratio of 0.34. This is a very positive value and a sign of high solvency as it would only need 0.34 years to pay back of all of its debts.
The Debt to FCF ratio of NVO (0.34) is better than 94.58% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that NVO is not too dependend on debt financing.
The current and quick ratio evaluation for NVO is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Profitability Analysis for NYSE:NVO

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:NVO scores a 9 out of 10:

With an excellent Return On Assets value of 25.10%, NVO belongs to the best of the industry, outperforming 97.54% of the companies in the same industry.
NVO has a better Return On Equity (80.99%) than 98.52% of its industry peers.
NVO has a Return On Invested Capital of 58.71%. This is amongst the best in the industry. NVO outperforms 99.01% 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 16.66%.
The last Return On Invested Capital (58.71%) for NVO is above the 3 year average (49.65%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 35.11%, NVO belongs to the best of the industry, outperforming 97.54% of the companies in the same industry.
NVO has a Operating Margin of 43.31%. This is amongst the best in the industry. NVO outperforms 98.03% of its industry peers.
NVO has a better Gross Margin (84.14%) than 88.18% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of NVO

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.