NYSE:NVO is not too expensive for the growth it is showing.

Last update: Feb 14, 2024

Our stock screener has singled out NOVO-NORDISK A/S-SPONS ADR (NYSE:NVO) as an attractive growth opportunity. NYSE:NVO is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

Assessing Growth Metrics for NYSE:NVO

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:NVO has earned a 8 for growth:

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.
Looking at the last year, NVO shows a very strong growth in Revenue. The Revenue has grown by 28.29%.
The Revenue has been growing by 9.64% on average over the past years. This is quite good.
Based on estimates for the next years, NVO will show a very strong growth in Earnings Per Share. The EPS will grow by 22.37% on average per year.
Based on estimates for the next years, NVO will show a very strong growth in Revenue. The Revenue will grow by 73.15% 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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

What does the Valuation looks like for NYSE:NVO

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:NVO, the assigned 5 reflects its valuation:

NVO's Price/Earnings ratio is a bit cheaper when compared to the industry. NVO is cheaper than 79.70% of the companies in the same industry.
Based on the Price/Forward Earnings ratio, NVO is valued a bit cheaper than 77.72% 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 78.22% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, NVO is valued a bit cheaper than 78.22% of the companies in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NVO has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as NVO's earnings are expected to grow with 30.79% in the coming years.

What does the Health looks like for NYSE:NVO

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:NVO has earned a 7 out of 10:

An Altman-Z score of 12.75 indicates that NVO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 12.75, NVO belongs to the top of the industry, outperforming 89.60% 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.
Looking at the Debt to FCF ratio, with a value of 0.34, NVO belongs to the top of the industry, outperforming 94.55% of the companies in the same industry.
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.

A Closer Look at Profitability for NYSE:NVO

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:NVO has earned a 8 out of 10:

With an excellent Return On Assets value of 25.10%, NVO belongs to the best of the industry, outperforming 97.52% of the companies in the same industry.
With an excellent Return On Equity value of 80.99%, NVO belongs to the best of the industry, outperforming 98.51% of the companies in the same industry.
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.
NVO had an Average Return On Invested Capital over the past 3 years of 49.65%. This is significantly above the industry average of 17.04%.
The 3 year average ROIC (49.65%) for NVO is below the current ROIC(58.71%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 35.11%, NVO belongs to the top of the industry, outperforming 97.52% of the companies in the same industry.
NVO's Operating Margin of 43.31% is amongst the best of the industry. NVO outperforms 98.02% of its industry peers.
Looking at the Gross Margin, with a value of 84.14%, NVO belongs to the top of the industry, outperforming 88.12% of the companies in the same industry.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Check the latest full fundamental report of NVO for a complete fundamental analysis.

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.