Novo Nordisk (NVO 2.05%) reported earnings on Feb. 3, and the stock promptly cratered. There was, clearly, some bad news involved. However, long-term investors should step back and consider the good news that management also discussed. The two big stories, not surprisingly, are both centered on GLP-1 weight-loss drugs.
The bad news from Novo Nordisk
To get the bad news out of the way, Novo Nordisk provided pretty dismal guidance for 2026 when it reported 2025 earnings. There are obviously a lot of moving parts, but the big picture numbers are that sales and earnings are both expected to decline between 5% and 13%.
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That's bad news for sure, but the drivers are important to keep in mind. One of the most important is lower pricing on GLP-1 drugs in the U.S. market. The lower prices basically came out of an agreement with the U.S. government. But the CEO of the company made an interesting statement about the company's results, telling CNBC that "People should expect that it goes down before it comes back up."
The good news from Novo Nordisk
This is where you need to shift gears to the good news, because the company saw more customers buy its new GLP-1 pill than it had originally expected. After just four weeks, the company had 170,000 patients using the pill version of its weight loss drug. That's a far more rapid adoption rate than the pharmaceutical giant's other GLP-1 drugs, and it speaks to the long-term opportunity.
NYSE: NVO
Key Data Points
Consumers prefer taking pills to taking injections, for obvious reasons. So Novo Nordisk's GLP-1 pill potentially opens up a larger market. Add in the lower prices from the deal with the U.S. government, and there's a second tailwind for demand. The big opportunity isn't price at this point; it is volume.
Think long term with Novo Nordisk
Novo Nordisk's stock price has lost two-thirds of its value since peaking in 2024. And yet it remains an important player in the still emerging GLP-1 space. While some on Wall Street may have hoped that being first to market with a GLP-1 pill would lead to an instant business upturn, that probably wasn't a reasonable expectation.
However, the early success of the pill indicates that, eventually, volume could offset the GLP-1 pricing hit that will take shape in 2026. Given the CEO's comments about 2026, that seems to be the company's internal expectation. After 2026, the story here may look a lot more positive.
