Introduction

In this article, we present a full intrinsic valuation and DCF analysis of Novo Nordisk, one of the world’s leading biopharmaceutical companies. All figures are shown in Danish Kroner (DKK) for consistency throughout the valuation. This analysis focuses on Novo Nordisk’s long-term cash-flow potential, operational strengths, and strategic investments that shape its intrinsic value.

Nothing in this article constitutes investment advice. Equity investments carry significant risk, and you should consult a qualified financial advisor before making any investment decisions.

tldr : Novo Nordisk is still undervalued in a value-trap scenario

In a no-growth scenario, where Novo Nordisk’s business stagnates and the company becomes a potential value trap, my intrinsic valuation estimates a fair value of 377 DKK per share. This represents a modest 17% upside from current levels.

However, I am fundamentally optimistic about Novo Nordisk’s long-term growth prospects. Under my base-case assumptions—which include continued demand for obesity and diabetes treatments, expanding international revenue, and sustained cash-flow growth—the intrinsic valuation rises to 617 DKK per share for the company’s Class B stock. This reflects a compelling 114% potential upside for long-term investors.

A Primer on Novo Nordisk : The Company

Novo Nordisk is Denmark’s largest company by market capitalization and the second largest by revenue. Its shares trade both on the Danish exchange as Novo Nordisk B and on the New York Stock Exchange under the ticker NYSE:NVO. In 2024, Novo Nordisk briefly became the most valuable company in Europe. Since reaching those all-time highs, however, the stock has undergone a steep correction, falling more than 60% from its peak.

Novo Nordisk Revenue Breakdown by Product Category

Novo Nordisk generated 290 Billion DKK in 2024 full-year revenue with YoY growth rate at 25%. Their revenue can be broken down into threee segments as such:

• Diabetes Care accounting for 71% of total revneue, 19% growth rate in 2024.
• Obesity Care accounting for 22% of total revneue, 56% growth rate in 2024.
• Rare Diasease accounting for 6.4% of total revneue, 9% growth rate in 2024.

Novo Nordisk is the world's largest producer of insulin, having produced 50% of global insuin supply in 2022. Insulin sales revenue grew 15% year of year in 2024 to 55.3 Billion DKK in 2024, representing a 19% revenue segment for the company.

Novo Nordisk Revenue By Major Products 2020 and 2024

Revenue in Millions of Danish Kroner (M DKK)

Novo Nordisk Growth Story - Diabetes + Obesity Care

Insulin and Diabetes Care medications generated more than 75% of Novo Nordisk's total revenue in 2020. Add Wegovy to the mix and fast forward 2024, the segmant makes a whopping 92% of total revenue. Total revenue itself scaled up 2.5X in the past four years.

Ozempic and Wegovy are Novo Nordisk's superhit drugs, accounting for more than 60% of total revenue in 2024. The following table provides an a further expanded breakdown by revenue, product, region, and growth rate.

Novo Nordisk Operating Margins, Return on Investment, Capex and Acquisitons

Novo Nordisk's scaling is more than just revenue growth since 2020. A deeper dive into the company's financial statements reveals a powerful trajectory in profit margins, strategic investments, and R&D (Research and Development), all critical to the current Novo Nordisk valuation.

• Operating profit scaled from 54 Billion DKK to 128 Bn DKK
• R&D expenses scaled from 17Bn DKK to 48Bn DKK
• Capital Expendites in forms of Property, Plant & Equipment (PP&E) scaled from 5.8Bn DKK in 2020 to 47Bn DKK in 2024.
• Novo Nordisk made three major acquisitons from 2020 - 2024
  • Dicerna Pharmaceuticals for 18 Bn DKK in 2021
  • Forma Therapeutics for 7Bn DKK in 2022
  • Catalent Inc. for a whopping 82Bn DKK in Q4 2024

Novo Nordisk Valuation DCF Inputs

This Intrinsic Discounted Cash Flow Valuation of Novo Nordisk in Danish Kroner (DKK) is done in the valuation template provided by Prof. Aswath Damodaran of NYU Stern. A huge nod to the 'Dean of Valuation' himself. I give my immense thanks and gratitude to Prof. Damodaran for I learnt my valuation techniques reading his lectures and experimenting on his spreadsheets. Most of the global and industry numbers used in the valuation also come from his data series.

• Rate of Growth Assumption: Novo Nordisk has a history of innovation and deep specialization in developing medications for blood and heart related ailments. The company has an impressive pipeline in Diabetes, Obesity, Rare Diseases, and Cardiovascular and Emerging Therapy Areas. Patents for Ozempic®, Wegovy®, and Rybelsus® are good till 2032 in the US and 2031 in Europe, with the nearest expiration date of 2026 for China. Morgan stanley estimates the weight loss segment could rise to $150bn by 2035 from $15bn in 2024. Similarly, Wegovy has FDA approval for NASH/MASH treatements, a treatement market expected to grow at at a CAGR of 17.7% till 2033.

• Novo Nordisk's CapEx and Acquisitons are in place showcasing the company expects sustained and increasing demand for their top-selling products. Given the sustained trend of weight loss medications and Ozempic's efficacy in treatement of type-2 diabetes, I do not expect any significant decline in top line growth. Type-2 diabetes and weight management are not going anywhere, and neither is Novo Nordisk's positon in treatement of these diseases, regardless of what the media says.

• Novo Nordisk recently failed to gain FDA approval as the Evoke Phase 3 trial did not demonstrate a statistically significant reduction in Alzheimer's disease progression. While not a current success, Novo Nordisk has the R&D capital required to keep up with their trails, which upon success would be a completely new avenue for growth. Treatements for Alzheimer's disease are expected to grow at a CAGR of 23.4% till 2032 to reach $19bn. I do not include any growth that could potentially come from this market in conducting this valuation.

• Cost of Capital of 7.9% accouting for equity and debt part of the capital. Refer to the Cost of Capital worksheet in the attached Google Sheets to see how this number appears.

• I give Novo Nordisk a high growth rate of 11.13% for 5-years because I believe the company's revenue growth is not stopping anytime soon. Although not as impressive as North America growth, Novo Nordisk managed to get an impressive 70% growth in it's international segment from 2020 to 2024. I maintain growth will be sustained.

  Novo Nordisk Revenue Breakdown by Region 2020 and 2024

  Segmant	2020 Revenue	2024 Revenue	Growth
  North America	61,117	178,172	191%
  International	65,829	112,231	70.5%

  ---

• Effective tax rate of 20.4% derived from financial statements.

• ROIC during stable growth is set at 25% for industry average growth. Current Return on Invested Capital of 47% is based on current inputs.

Per Share Value of Novo Nordisk

Based on the inputs and assumptions, I derive a 617 DKK per share value for Novo Nordisk Class B Shares. Novo Nordisk currently trades for 317 DKK per share, implying a severe undervaluation based on my estimates.

Download the spreadsheet to adjust inputs and do your own valuation.

Conclusion

Novo Nordisk remains one of the most influential healthcare companies in the world. As the producer of roughly half of the global insulin supply, the company operates an extensive international network of manufacturing, distribution, and research facilities. Its brand recognition is exceptionally strong — the Novo Nordisk logo is familiar even in remote regions across Asia and Africa.

With the breakout success of Ozempic and Wegovy, Novo Nordisk has accelerated capital expenditures and strategic acquisitions to expand capacity and secure long-term growth. These investments position the company to scale production and meet rising global demand for metabolic and obesity treatments.

Based on my DCF valuation and the company’s structural strengths, I view Novo Nordisk as an attractive addition to a long-term portfolio at current price levels.