GLP-1 drugmaker Novo Nordisk's (NVO +0.17%) stock jumped at the open and remains up 3.2% as of 10:20 a.m. ET after the company reported earnings this morning.
Novo reported smaller-than-expected Q1 sales and lowered its forecast for the rest of the year. Investors seem more interested in comments about the chances Wegovy sales will improve later this year through the company's partnership with Hims & Hers Health (HIMS 3.56%) as other GLP-1 compounders are driven out of the market.
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Novo Nordisk Q1 earnings
Novo Nordisk reports its results in Danish kroner (DKK) rather than U.S. dollars. Sales grew 19% year over year to 78.1 billion DKK ($11.9 billion). Net income for the quarter rose 14% to 29 billion DKK ($4.4 billion). According to S&P Global Market Intelligence data, that works out to $0.95 per share.
The growth rate in Q1 was good, but management lowered its forecast for the rest of this year "due to lower-than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the US."
NYSE: NVO
Key Data Points
Is Novo Nordisk stock a buy?
Management now forecasts sales growth in the 13%-21% range this year. It says operating profits will grow faster at 16%-24%. And of course, Novo Nordisk stock itself currently sells for 19.3 times trailing earnings.
At a midpoint expected growth rate of 20%, that seems an attractive valuation, yielding a PEG ratio of just under 1.0. Throw in a tidy 2.4% dividend yield, and the prospect for market share gains through the company's partnership with Hims & Hers, and I continue to see Novo Nordisk as the best value play in GLP-1 weight-loss drugs.
