NOVO-NORDISK A/S-SPONS ADR (NVO) Stock Fundamental Analysis
NYSE:NVO - New York Stock Exchange, Inc. - US6701002056 - ADR - Currency: USD
We assign a fundamental rating of 7 out of 10 to NVO. NVO was compared to 195 industry peers in the Pharmaceuticals industry. NVO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NVO is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings would make NVO suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year NVO was profitable.
In the past year NVO had a positive cash flow from operations.
NVO had positive earnings in each of the past 5 years.
NVO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 23.83%, NVO belongs to the best of the industry, outperforming 98.92% of the companies in the same industry.
The Return On Equity of NVO (78.59%) is better than 98.92% of its industry peers.
The Return On Invested Capital of NVO (52.61%) is better than 98.92% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NVO is significantly above the industry average of 43.99%.
The 3 year average ROIC (50.71%) for NVO is below the current ROIC(52.61%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.83% | ||
| ROE | 78.59% | ||
| ROIC | 52.61% |
ROA(3y)24.73%
ROA(5y)26.85%
ROE(3y)70.85%
ROE(5y)69.34%
ROIC(3y)50.71%
ROIC(5y)53.98%
1.3 Margins
With an excellent Profit Margin value of 35.01%, NVO belongs to the best of the industry, outperforming 96.77% of the companies in the same industry.
In the last couple of years the Profit Margin of NVO has remained more or less at the same level.
Looking at the Operating Margin, with a value of 45.85%, NVO belongs to the top of the industry, outperforming 98.39% of the companies in the same industry.
In the last couple of years the Operating Margin of NVO has remained more or less at the same level.
With an excellent Gross Margin value of 84.66%, NVO belongs to the best of the industry, outperforming 90.86% of the companies in the same industry.
NVO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.85% | ||
| PM (TTM) | 35.01% | ||
| GM | 84.66% |
OM growth 3Y1.58%
OM growth 5Y1.31%
PM growth 3Y2.77%
PM growth 5Y0.85%
GM growth 3Y0.43%
GM growth 5Y0.08%
2. Health
2.1 Basic Checks
NVO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NVO has more shares outstanding than it did 1 year ago.
NVO has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, NVO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 8.13 indicates that NVO is not in any danger for bankruptcy at the moment.
The Altman-Z score of NVO (8.13) is better than 84.41% 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.
Looking at the Debt to FCF ratio, with a value of 0.85, NVO belongs to the top of the industry, outperforming 95.70% of the companies in the same industry.
A Debt/Equity ratio of 0.43 indicates that NVO is not too dependend on debt financing.
NVO has a worse Debt to Equity ratio (0.43) than 62.90% of its industry peers.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 0.85 | ||
| Altman-Z | 8.13 |
ROIC/WACC8.09
WACC6.5%
2.3 Liquidity
NVO has a Current Ratio of 0.94. This is a bad value and indicates that NVO is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of NVO (0.94) is worse than 87.63% of its industry peers.
A Quick Ratio of 0.75 indicates that NVO may have some problems paying its short term obligations.
NVO has a worse Quick ratio (0.75) than 87.10% of its industry peers.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.75 |
3. Growth
3.1 Past
NVO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.83%, which is quite impressive.
NVO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.16% yearly.
Looking at the last year, NVO shows a very strong growth in Revenue. The Revenue has grown by 26.15%.
The Revenue has been growing by 15.74% on average over the past years. This is quite good.
EPS 1Y (TTM)26.83%
EPS 3Y1.11%
EPS 5Y3.16%
EPS Q2Q%22.4%
Revenue 1Y (TTM)26.15%
Revenue growth 3Y22.31%
Revenue growth 5Y15.74%
Sales Q2Q%21.42%
3.2 Future
The Earnings Per Share is expected to grow by 16.88% on average over the next years. This is quite good.
The Revenue is expected to grow by 15.14% on average over the next years. This is quite good.
EPS Next Y23.32%
EPS Next 2Y24.64%
EPS Next 3Y23.35%
EPS Next 5Y16.88%
Revenue Next Year24.84%
Revenue Next 2Y23.11%
Revenue Next 3Y21.11%
Revenue Next 5Y15.14%
3.3 Evolution
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 29.42, which means the current valuation is very expensive for NVO.
Based on the Price/Earnings ratio, NVO is valued cheaply inside the industry as 81.18% of the companies are valued more expensively.
NVO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.58, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 21.58, the valuation of NVO can be described as rather expensive.
NVO's Price/Forward Earnings ratio is rather cheap when compared to the industry. NVO is cheaper than 80.11% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 24.47. NVO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.42 | ||
| Fwd PE | 21.58 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NVO is valued cheaper than 80.65% of the companies in the same industry.
NVO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NVO is cheaper than 80.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.53 | ||
| EV/EBITDA | 19.49 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 23.35% in the coming years.
PEG (NY)1.26
PEG (5Y)9.3
EPS Next 2Y24.64%
EPS Next 3Y23.35%
5. Dividend
5.1 Amount
NVO has a Yearly Dividend Yield of 1.70%. Purely for dividend investing, there may be better candidates out there.
The stock price of NVO dropped by -22.41% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 4.30, NVO pays a better dividend. On top of this NVO pays more dividend than 90.86% of the companies listed in the same industry.
NVO's Dividend Yield is slightly below the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
5.2 History
On average, the dividend of NVO grows each year by 11.24%, which is quite nice.
NVO has been paying a dividend for at least 10 years, so it has a reliable track record.
NVO has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)11.24%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
NVO pays out 46.60% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of NVO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP46.6%
EPS Next 2Y24.64%
EPS Next 3Y23.35%
NOVO-NORDISK A/S-SPONS ADR
NYSE:NVO (1/24/2025, 8:04:00 PM)
Premarket: 86.17 -1.8 (-2.05%)87.97
+6.87 (+8.47%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners37.53%
Inst Owner Change-0.83%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap390.70B
Analysts74
Price Target137.98 (56.85%)
Short Float %0.19%
Short Ratio1.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
Yearly Dividend7.54
Dividend Growth(5Y)11.24%
DP46.6%
Div Incr Years7
Div Non Decr Years7
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2%
Min EPS beat(2)-4.65%
Max EPS beat(2)0.64%
EPS beat(4)3
Avg EPS beat(4)2.69%
Min EPS beat(4)-4.65%
Max EPS beat(4)7.46%
EPS beat(8)6
Avg EPS beat(8)1.99%
EPS beat(12)9
Avg EPS beat(12)1.87%
EPS beat(16)13
Avg EPS beat(16)2.74%
Revenue beat(2)0
Avg Revenue beat(2)-2.2%
Min Revenue beat(2)-2.57%
Max Revenue beat(2)-1.84%
Revenue beat(4)2
Avg Revenue beat(4)0.66%
Min Revenue beat(4)-2.57%
Max Revenue beat(4)4.69%
Revenue beat(8)5
Avg Revenue beat(8)0.48%
Revenue beat(12)8
Avg Revenue beat(12)0.85%
Revenue beat(16)11
Avg Revenue beat(16)1.1%
PT rev (1m)0.6%
PT rev (3m)-3.47%
EPS NQ rev (1m)0.01%
EPS NQ rev (3m)-0.48%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.73%
Revenue NY rev (1m)-0.45%
Revenue NY rev (3m)-1.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.42 | ||
| Fwd PE | 21.58 | ||
| P/S | 10.29 | ||
| P/FCF | 41.53 | ||
| P/OCF | 23.55 | ||
| P/B | 23.1 | ||
| P/tB | 42.16 | ||
| EV/EBITDA | 19.49 |
EPS(TTM)2.99
EY3.4%
EPS(NY)4.08
Fwd EY4.63%
FCF(TTM)2.12
FCFY2.41%
OCF(TTM)3.74
OCFY4.25%
SpS8.55
BVpS3.81
TBVpS2.09
PEG (NY)1.26
PEG (5Y)9.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.83% | ||
| ROE | 78.59% | ||
| ROCE | 65.62% | ||
| ROIC | 52.61% | ||
| ROICexc | 87.1% | ||
| ROICexgc | 166.58% | ||
| OM | 45.85% | ||
| PM (TTM) | 35.01% | ||
| GM | 84.66% | ||
| FCFM | 24.77% |
ROA(3y)24.73%
ROA(5y)26.85%
ROE(3y)70.85%
ROE(5y)69.34%
ROIC(3y)50.71%
ROIC(5y)53.98%
ROICexc(3y)62.18%
ROICexc(5y)66.41%
ROICexgc(3y)126.94%
ROICexgc(5y)112.71%
ROCE(3y)65.89%
ROCE(5y)70.28%
ROICexcg growth 3Y18.83%
ROICexcg growth 5Y7.73%
ROICexc growth 3Y4.62%
ROICexc growth 5Y-4.53%
OM growth 3Y1.58%
OM growth 5Y1.31%
PM growth 3Y2.77%
PM growth 5Y0.85%
GM growth 3Y0.43%
GM growth 5Y0.08%
F-Score6
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 0.85 | ||
| Debt/EBITDA | 0.36 | ||
| Cap/Depr | 302.86% | ||
| Cap/Sales | 18.92% | ||
| Interest Coverage | 248.63 | ||
| Cash Conversion | 83.86% | ||
| Profit Quality | 70.77% | ||
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.75 | ||
| Altman-Z | 8.13 |
F-Score6
WACC6.5%
ROIC/WACC8.09
Cap/Depr(3y)245.39%
Cap/Depr(5y)263.68%
Cap/Sales(3y)10.11%
Cap/Sales(5y)11.39%
Profit Quality(3y)99.62%
Profit Quality(5y)92.21%
High Growth Momentum
Growth
EPS 1Y (TTM)26.83%
EPS 3Y1.11%
EPS 5Y3.16%
EPS Q2Q%22.4%
EPS Next Y23.32%
EPS Next 2Y24.64%
EPS Next 3Y23.35%
EPS Next 5Y16.88%
Revenue 1Y (TTM)26.15%
Revenue growth 3Y22.31%
Revenue growth 5Y15.74%
Sales Q2Q%21.42%
Revenue Next Year24.84%
Revenue Next 2Y23.11%
Revenue Next 3Y21.11%
Revenue Next 5Y15.14%
EBIT growth 1Y33.56%
EBIT growth 3Y24.23%
EBIT growth 5Y17.25%
EBIT Next Year40.23%
EBIT Next 3Y26.96%
EBIT Next 5Y18.36%
FCF growth 1Y15.82%
FCF growth 3Y32.84%
FCF growth 5Y16.5%
OCF growth 1Y71.91%
OCF growth 3Y27.98%
OCF growth 5Y19.32%