Does Novo Nordisk’s Recent 19.8% Drop Signal a New Opportunity in 2025?

Ever wondered if Novo Nordisk’s stock is a hidden bargain or already priced for perfection? Let’s break down what’s happening beneath the surface so you can invest with clarity. The stock has seen some sharp swings recently, down 7.0% in the past week and a striking 19.8% over the past month. This might make you question whether it signals opportunity or fresh risks. Market chatter has focused on the company’s headline-grabbing progress in obesity drug development and ongoing momentum in diabetes treatments. Both areas continue to spark global interest. These updates are driving market sentiment and influencing investor expectations, even as concerns remain about competition and pricing pressures in the sector. For numbers-driven investors, Novo Nordisk scores 5 out of 6 on our valuation checks, putting it at the top of its class by traditional measures. Before you make a move, let’s walk through how these scores are calculated. There is an even more insightful way to assess a stock’s worth coming up at the end of this article.

Find out why Novo Nordisk's -57.3% return over the last year is lagging behind its peers.

Approach 1: Novo Nordisk Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today's price, reflecting what those future earnings are worth right now. This method is favored for its focus on the cash actually flowing into the company over time, capturing both current performance and future potential.

For Novo Nordisk, the current Free Cash Flow stands at approximately DKK 67.6 billion. Analysts provide direct estimates for up to 5 years, after which Simply Wall St extrapolates further projections. Over the coming decade, Free Cash Flow is expected to more than triple, reaching around DKK 222.3 billion by 2035. Notable milestones include DKK 135.3 billion in 2029, showcasing a robust upward trajectory as forecasted by both analysts and extended models.

All cash flows mentioned are in Danish Krone (DKK), Novo Nordisk's reporting currency. The DCF model used here, the 2 Stage Free Cash Flow to Equity approach, arrives at an estimated intrinsic value of $163.42 per share. This represents a striking 72.0% discount compared to the recent share price, strongly suggesting that shares are significantly undervalued according to this method.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Novo Nordisk is undervalued by 72.0%. Track this in your watchlist or portfolio, or discover 876 more undervalued stocks based on cash flows.

Story Continues

NVO Discounted Cash Flow as at Nov 2025

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Novo Nordisk.

Approach 2: Novo Nordisk Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is often the go-to valuation metric for established, profitable companies like Novo Nordisk. It reflects what investors are willing to pay for each dollar of earnings, making it particularly useful for comparing mature businesses with steady profits. A "normal" or "fair" PE ratio can vary and is influenced by a company’s growth prospects and perceived risks. Faster-growing or more stable companies tend to justify higher PE multiples, as investors anticipate bigger or more reliable future profits.

Novo Nordisk currently trades at a PE ratio of 12.47x. For context, this is below both the peer average of 14.77x and the industry average for Pharmaceuticals at 17.89x. While such comparisons are helpful, they can miss company-specific nuances, such as differences in growth rates, profit margins, or risk profiles.

This is where Simply Wall St’s proprietary "Fair Ratio" comes in. The Fair Ratio estimates the PE multiple a company deserves based on the latest earnings growth, profitability, size, industry type, and perceived risks. It offers a more tailored benchmark than generic market or industry averages and factors in what truly sets Novo Nordisk apart from its sector peers.

Comparing Novo Nordisk’s actual PE of 12.47x to its Fair Ratio of 32.95x may suggest that the stock is undervalued by this measure. The significant gap could indicate the market is overlooking the company’s strengths and growth prospects.

Result: UNDERVALUEDNYSE:NVO PE Ratio as at Nov 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1401 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Novo Nordisk Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple but powerful concept: it connects your view of a company’s story—what you believe about its future, strengths, and risks—with a set of financial forecasts and, ultimately, a fair value for the stock.

Narratives make valuation accessible by giving your personal perspective a voice in the numbers, letting you map your assumptions about revenue growth, margins, and profitability directly to what the business is really worth. On Simply Wall St’s Community page, millions of investors can easily create, share, and compare Narratives for companies like Novo Nordisk using intuitive tools, with no spreadsheets required.

This means you can see instantly whether current market prices align with your fair value, making it clearer when it might be time to buy, sell, or hold. Since Narratives update dynamically as new information, such as earnings results or major news, becomes available, your view remains current and relevant.

For example, one investor might craft a bullish Narrative for Novo Nordisk, projecting rapid adoption of new obesity drugs and assigning a fair value near $160 per ADR. A more cautious investor, concerned about competitive threats and policy risk, could arrive at a fair value closer to $70. This shows how Narratives can reflect both optimism and skepticism, side by side.

Do you think there's more to the story for Novo Nordisk? Head over to our Community to see what others are saying!NYSE:NVO Community Fair Values as at Nov 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NVO.

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