Don't overlook NYSE:NVO—a stock with solid growth prospects and a reasonable valuation.

Last update: Nov 21, 2023

NOVO-NORDISK A/S-SPONS ADR (NYSE:NVO) has caught the eye of our stock screener as an affordable growth stock. NYSE:NVO is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

How We Gauge 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 19.65%, which is quite good.
The Revenue has grown by 28.29% in the past year. This is a very strong growth!
Measured over the past years, NVO shows a quite strong growth in Revenue. The Revenue has been growing by 9.64% on average per year.
NVO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.86% yearly.
The Revenue is expected to grow by 16.43% on average over the next years. This is quite good.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Evaluating Valuation: NYSE:NVO

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:NVO boasts a 5 out of 10:

Based on the Price/Earnings ratio, NVO is valued a bit cheaper than 79.02% of the companies in the same industry.
76.59% of the companies in the same industry are more expensive than NVO, based on the Price/Forward Earnings ratio.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NVO indicates a somewhat cheap valuation: NVO is cheaper than 78.05% of the companies listed in the same industry.
NVO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NVO is cheaper than 80.98% of the companies in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of NVO may justify a higher PE ratio.
A more expensive valuation may be justified as NVO's earnings are expected to grow with 28.68% in the coming years.

Understanding NYSE:NVO's Health

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:NVO has earned a 7 out of 10:

NVO has an Altman-Z score of 11.20. This indicates that NVO is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 11.20, NVO belongs to the best of the industry, outperforming 91.71% of the companies in the same industry.
The Debt to FCF ratio of NVO is 0.34, which is an excellent value as it means it would take NVO, only 0.34 years of fcf income to pay off all of its debts.
NVO has a better Debt to FCF ratio (0.34) than 95.61% of its industry peers.
NVO has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.
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.

What does the Profitability looks like for NYSE:NVO

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:NVO has earned a 9 out of 10:

Looking at the Return On Assets, with a value of 25.10%, NVO belongs to the top of the industry, outperforming 97.07% of the companies in the same industry.
Looking at the Return On Equity, with a value of 80.99%, NVO belongs to the top of the industry, outperforming 97.56% of the companies in the same industry.
With an excellent Return On Invested Capital value of 58.71%, NVO belongs to the best of the industry, outperforming 99.02% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for NVO is significantly above the industry average of 15.58%.
The 3 year average ROIC (49.65%) for NVO is below the current ROIC(58.71%), indicating increased profibility in the last year.
NVO has a Profit Margin of 35.11%. This is amongst the best in the industry. NVO outperforms 97.56% of its industry peers.
NVO has a better Operating Margin (43.31%) than 98.54% of its industry peers.
NVO's Gross Margin of 84.14% is amongst the best of the industry. NVO outperforms 87.80% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.