Is NVO a good stock to buy? We came across a bullish thesis on Novo Nordisk A/S on Hated Moats’s Substack by Hated Moats Investors. In this article, we will summarize the bulls’ thesis on NVO. Novo Nordisk A/S’s share was trading at $42.96 as of June 5th. NVO’s trailing and forward P/E were 10.09 and 12.77 respectively according to Yahoo Finance.
Novo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products. NVO remains a compelling value opportunity despite a significant deterioration in near-term fundamentals, as the market appears to be pricing in an overly pessimistic outlook that assumes the company’s recent challenges are permanent rather than cyclical. The investment case has shifted from a straightforward GLP-1 hypergrowth story to one centered on stabilization, recovery, and the enduring strength of Novo’s obesity and diabetes franchises.
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While management lowered expectations following weaker Wegovy momentum, increased competition, pricing pressure, market-share declines, and disappointing CagriSema trial results, the company also secured an important new growth catalyst with the FDA approval and U.S. launch of oral Wegovy, the first approved oral obesity GLP-1 treatment. The valuation assumes 2026 will be a reset year, with revenue declining 9% before returning to growth as obesity adoption expands, oral Wegovy gains traction, and Novo leverages its leading position across global metabolic disease markets.
Although margins and returns on capital are expected to moderate from prior peak levels, the business is still projected to generate returns well above its cost of capital while benefiting from a large installed base, strong cash generation, and continued leadership in obesity and diabetes care. Using a discounted cash flow framework with conservative assumptions for revenue growth, profitability, reinvestment, and terminal value, Novo’s intrinsic value is estimated at DKK 476 per share, or approximately $74 per ADR, compared to a market price of DKK 248.
This implies roughly 92% upside and a margin of safety of nearly 48%. The market currently appears to be discounting a prolonged period of weak growth and margin compression, whereas even a modest recovery in operations could support substantial shareholder returns, making Novo Nordisk a deeply undervalued investment opportunity.
Previously, we covered a bullish thesis on Novo Nordisk A/S (NVO) by Kontra Investments in May 2025, which highlighted the company’s dominant GLP-1 franchise, strong Wegovy-driven obesity growth, expanding global reach, and long-term compounding potential. NVO’s stock price has depreciated by approximately 36.58% since our coverage. Hated Moats Investors shares a similar view but emphasizes on the stock’s deep undervaluation, 2026 reset dynamics, and recovery potential despite mounting competitive and pricing pressures.
Novo Nordisk A/S is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held NVO at the end of the first quarter which was 55 in the previous quarter. While we acknowledge the risk and potential of NVO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVO and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
