A new version of the weight loss drug will hit the market next month.
The shot could re-accelerate Novo Nordisk’s top-line growth, potentially igniting a strong stock comeback from its depressed valuation.
10 Stocks We Like Better than Novo Nordisk
Is there any more popular health trend right now than GLP-1 agonist obesity drugs like Ozempic? Probably not. Ironically, though, investing in Ozempic, or its maker, Novo Nordisk(NYSE: NVO )This year has not been very good.
By 2025, the share has fallen by 40%. Competition from Eli LillyTelehealth companies selling compound versions of a similar drug, Zepbound, and Ozempic, pressured Novo Nordisk’s business to the point of firing its CEO earlier this year.
Investing in a cold stock like Novo Nordisk might feel a little scary, but things are starting to heat up again for the pharmaceutical giant.
Image source: Novo Nordisk
Shares of Novo Nordisk jumped on Tuesday after news that the Food and Drug Administration (FDA) had formally approved its application to sell Wegovy’s pill form in the United States. Wegovy is the same drug as Ozempic — commonly called semaglutide — but while the latter is approved to treat type 2 diabetes, Wegovy is the prescribed brand for weight management.
The FDA’s decision is a big deal for several reasons. First, the Wegovy pill will be the first oral GLP-1 drug on the market. In a Phase 3 trial of the treatment, participants showed an average weight loss of 16.6% over 64 weeks, and one in three lost 20% or more. Second, most patients prefer to inject the pill daily.
This new version of the drug will give Novo Nordisk an important tool to push back against the pressure it faces from the competition. Eli Lilly is seeking FDA approval for its oral obesity drug, and could get it as soon as March, but Novo Nordisk has won the race to market. In the meantime, Wegovy could quickly gain traction, which would help Novo Nordisk if it remained the only approved pill of its kind for a limited time.
The Wegovy pill will be available to patients in early January, and Novo Nordisk’s CEO says the company has built up enough supply to support an aggressive product launch. He said, ‘This time we have enough pills.
Novo Nordisk’s business has clearly felt the heat of competition. Its revenue growth has been steadily slowing for more than a year. However, based on the headlines and stock performance, it would be easy to believe that the business has collapsed, and that is simply untrue.
In fact, Novo Nordisk continues to grow, with double-digit percentage revenue growth in its most recent quarter. Its earnings per share have nearly doubled since the start of 2023.
NVO revenue (quarterly YoY growth) data by YCharts.
After the stock’s slide, Novo Nordisk looks like a compressed spring — it’s just waiting to unleash its pent-up energy. The stock currently trades at a price-to-earnings ratio of 13 times expected 2025 earnings.
Even if its growth rate stabilizes at only low double-digit percentages, it’s still a bargain. However, the Wegovy pill could be an important catalyst that could re-accelerate the company’s top-line growth by mid-2026.
If Novo Nordisk can continue to grow its earnings at an annual growth rate of 15% or higher, it could easily justify the market moving its price-to-earnings ratio back above 20.
That means it could be a home run investment next year. A simple rebound in the stock’s valuation to 20 times earnings would equate to a share price increase of more than 50% from here, and that’s without factoring in potential double-digit earnings growth.
Additionally, at the current share price, the company’s dividend yield is 3.3%, which is close to its highest yield on record. If you add it all up, Novo Nordisk has built a market-exponential investment in 2026. It’s not a guaranteed outcome, but the tailwinds it should experience are reason enough to strongly consider adding the stock to your portfolio in the new year.
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. Motley Fool has a disclosure policy.
Should You Invest In Olympic Maker Novo Nordisk In 2026? Originally published by Motley Fool
