It's been a great morning session for Novo Nordisk A/S investors, who saw their shares rise 1.3% to a price of $49.35 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
The Market May Be Undervaluing Novo Nordisk A/S's Assets and Equity:
Novo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products in Europe, the Middle East, Africa, Mainland China, Hong Kong, Taiwan, North America, and internationally. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 22.94 and an average price to book (P/B) ratio of 3.19. In contrast, Novo Nordisk A/S has a trailing 12 month P/E ratio of 13.6 and a P/B ratio of 1.29.
Novo Nordisk A/S has moved -54.6% over the last year compared to 13.3% for the S&P 500 — a difference of -67.8%. Novo Nordisk A/S has a 52 week high of $112.52 and a 52 week low of $43.08.
Wider Gross Margins Than the Industry Average of 57.85%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $122,021 | $126,946 | $140,800 | $176,954 | $232,261 | $290,403 |
| Gross Margins | 84% | 84% | 83% | 84% | 85% | 85% |
| Net Margins | 32% | 33% | 34% | 31% | 36% | 35% |
| Net Income (M) | $38,951 | $42,138 | $47,757 | $55,525 | $83,683 | $100,988 |
| Net Interest Expense (M) | $220 | $390 | $289 | $378 | $542 | $1,640 |
| Depreciation & Amort. (M) | $5,661 | $5,753 | $6,025 | $6,553 | $7,289 | $8,545 |
| Earnings Per Share | $16.38 | $18.01 | $10.37 | $12.22 | $18.62 | $22.63 |
| EPS Growth | n/a | 9.95% | -42.42% | 17.84% | 52.37% | 21.54% |
| Free Cash Flow (M) | $46,782 | $51,951 | $55,000 | $78,887 | $108,908 | $120,968 |
| Total Debt (M) | $3,009 | $2,897 | $12,961 | $24,318 | $20,528 | $89,674 |
| Net Debt / EBITDA | -0.21 | -0.16 | 0.03 | 0.14 | 0.06 | 0.54 |
| Current Ratio | 1.06 | 0.94 | 0.86 | 0.89 | 0.82 | 0.74 |
Novo Nordisk A/S has generally positive cash flows and wider gross margins than its peer group. Additionally, the company's financial statements display positive EPS growth and healthy leverage levels. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.74.
