Despite its growth, NYSE:NVO remains within the realm of affordability.

Last update: Dec 6, 2024

Our stock screener has spotted NOVO-NORDISK A/S-SPONS ADR (NYSE:NVO) as a growth stock which is not overvalued. NYSE:NVO is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

How do we evaluate the Growth for NYSE:NVO?

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:NVO was assigned a score of 7 for growth:

NVO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.69%, which is quite impressive.
Looking at the last year, NVO shows a very strong growth in Revenue. The Revenue has grown by 26.15%.
NVO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.74% yearly.
The Earnings Per Share is expected to grow by 16.66% on average over the next years. This is quite good.
Based on estimates for the next years, NVO will show a quite strong growth in Revenue. The Revenue will grow by 15.91% 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.

Valuation Analysis for NYSE:NVO

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:NVO has earned a 5 for valuation:

Based on the Price/Earnings ratio, NVO is valued cheaper than 80.73% of the companies in the same industry.
NVO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. NVO is cheaper than 78.65% 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 79.69% 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 79.69% of the companies listed in the same industry.
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 23.30% in the coming years.

Understanding NYSE:NVO's Health Score

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:NVO has achieved a 7 out of 10:

An Altman-Z score of 9.52 indicates that NVO is not in any danger for bankruptcy at the moment.
NVO has a better Altman-Z score (9.52) than 84.90% of its industry peers.
NVO has a debt to FCF ratio of 0.85. This is a very positive value and a sign of high solvency as it would only need 0.85 years to pay back of all of its debts.
NVO's Debt to FCF ratio of 0.85 is amongst the best of the industry. NVO outperforms 96.35% of its industry peers.
NVO has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
Even though the debt/equity ratio score it not favorable for NVO, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
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.

How do we evaluate the Profitability for NYSE:NVO?

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:NVO was assigned a score of 9 for profitability:

With an excellent Return On Assets value of 23.83%, NVO belongs to the best of the industry, outperforming 98.96% of the companies in the same industry.
NVO has a Return On Equity of 78.59%. This is amongst the best in the industry. NVO outperforms 98.44% of its industry peers.
NVO's Return On Invested Capital of 52.61% is amongst the best of the industry. NVO outperforms 98.96% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NVO is significantly above the industry average of 43.16%.
The 3 year average ROIC (50.71%) for NVO is below the current ROIC(52.61%), indicating increased profibility in the last year.
NVO has a better Profit Margin (35.01%) than 96.88% of its industry peers.
Looking at the Operating Margin, with a value of 45.85%, NVO belongs to the top of the industry, outperforming 98.44% of the companies in the same industry.
NVO has a Gross Margin of 84.66%. This is amongst the best in the industry. NVO outperforms 91.15% of its industry peers.

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

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

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.