Shares of Novo Nordisk (NVO +7.94%) were down over 20% this week as of this writing on Friday, February 6th, at 11:00 AM EST, according to data from S&P Global Market Intelligence. The famed drugmaker has struggled over the last two years due to heavy competition and pricing pressure for weight-loss drugs. It is also trying to deal with aggressive competition from Hims & Hers.
Right now, Novo Nordisk stock is down 68% from all-time highs set in early 2024. Here's why it was falling again this week, and whether it is a buy today.
NYSE: NVO
Key Data Points
Weak 2026 guidance
Novo Nordisk reported earnings earlier this week, on February 3rd. Its financials looked solid, with revenue growing 10% year over year in constant currency in 2025, despite heavy pressure from other weight-loss drugmakers such as Eli Lilly.
However, investors were spooked by the weak 2026 guidance, which calls for a 5%-13% decline in sales and earnings compared to 2025. There is mounting competition for weight-loss drugs, including the new TrumpRx website, which offers discounted versions of these drugs, such as the company's Wegovy product. Even though the company had its oral weight-loss pill approved by the Food and Drug Administration (FDA) and should see volume increases, declining prices will be a hit to sales and earnings in 2026.
What's more, in some countries, generic versions of weight-loss drugs are already on the market, which management expects will eat into sales. Lastly, to add even more chaos to the situation, telehealth marketplaces Hims & Hers launched a knockoff of Wegovy and began selling it for just $49 a month. While it is highly likely the FDA will quickly whip Hims & Hers into shape, more uncertainty is never something that Wall Street is looking for.
Image source: Novo Nordisk.
Time to buy the dip?
This is the worst price drawdown in Novo Nordisk's history, going back to 1990. Despite this, the stock has produced a cumulative total return of over 30,000% for shareholders since 1990, making it one of the best-performing stocks of the last few decades.
Novo Nordisk is a methodical business, banking on steady innovations over the last 100 years when it first invented Insulin. Weight-loss drugs are its new blockbuster, facing competition today but still poised to be a huge market over the next few decades.
At a price-to-earnings ratio (P/E) of 13, investors are heavily discounting the likelihood that Novo Nordisk will maintain its market share in weight-loss drugs, and they completely discount any future drug innovations in its pipeline. If you like this business, now may be a good time to buy the dip on Novo Nordisk stock.
