Novo Nordisk (NVO Quick QuoteNVO - Free Report) shares have plunged 10.2% over three months as regulatory setbacks, a 2025 guidance cut, and softer demand for its blockbuster semaglutide-based (GLP-1) drugs, Ozempic (for type II diabetes [T2D]) and Wegovy (for obesity), particularly in the U.S. obesity market, weigh on investor sentiment. The uptake of these drugs has been disrupted by illegal compounded semaglutide products and rising competition from Eli Lilly’s (LLY Quick QuoteLLY - Free Report) Mounjaro (T2D) and Zepbound (obesity), which resulted in the July guidance cut. International demand has also been uneven, adding to pressure on NVO’s GLP-1 franchise.

The same factors also dragged down Novo Nordisk’s third-quarter performance, resulting in earnings and revenues that fell short of expectations. Following third-quarter results, the company further trimmed its 2025 sales and operating profit outlook due to pricing pressure, intensifying GLP-1 competition, and foreign exchange headwinds. NVO’s global diabetes market share fell to 31.6% in September as Lilly gained ground. In contrast, Eli Lilly delivered strong third-quarter results, topping earnings and revenue expectations as Mounjaro and Zepbound revenues more than doubled on surging demand. The company also raised its 2025 revenue and EPS outlook, with the two drugs generating $24.8 billion in the first nine months of 2025, representing 54% of total sales.

To tackle the same, Novo Nordisk announced a major restructuring program in September 2025 to streamline operations and reinvest in its core diabetes and obesity businesses. The plan includes reducing its global workforce by about 9,000 employees, targeting annualized savings of around DKK 8 billion by 2026.

Novo Nordisk’s new agreement with the U.S. Administration will cut Ozempic and Wegovy prices from 2026 to boost patient access across Medicare, Medicaid and direct channels. The deal will allow Novo Nordisk to expand its authentic semaglutide supply and, at the same time, earn the company a three-year tariff exemption, providing near-term support. Still, the mandated pricing reset raises concerns, as margin compression and existing market challenges create uncertainty around NVO’s long-term GLP-1 economics, competitive position and medium-term growth outlook.

Novo Nordisk faces earnings risk and execution challenges despite its strong fundamentals and advancing pipeline. While its long-term potential remains tied to the large, underpenetrated obesity market, near-term headwinds make the stock a risky bet at current levels. Let’s dig deeper and understand the company’s strengths and weaknesses to understand how to play the stock.

Semaglutide – Still NVO’s Primary Top-Line Driver

Novo Nordisk’s success in recent years has been driven by the sales of Ozempic and Rybelsus (oral) for T2D, and Wegovy for obesity. Despite recent market turmoil, the company is still a dominant player in the diabetes and obesity care market, with one of the industry's broadest portfolios.

Ozempic and Wegovy are the major revenue drivers, generating DKK 152.5 billion in the first nine months of 2025. In the third quarter of 2025, the drugs reported combined sales of DKK 51.1 billion, representing year-over-year growth of 9% and 23%, respectively. As of July 1, CVS Caremark, a major pharmacy benefit manager, has designated Wegovy as its preferred GLP-1 therapy for weight loss.

Novo Nordisk is expanding semaglutide's reach through new indications. Wegovy is now approved for reducing major cardiovascular events, easing HFpEF symptoms, and relieving osteoarthritis-related knee pain in obesity.

The FDA is also reviewing Novo Nordisk’s application for a 25 mg oral semaglutide for obesity, with a decision expected by year-end. Oral pills could boost adherence over injections. Potential approval would give Novo Nordisk a notable advantage as the sole manufacturer of a marketed oral obesity pill, positioning it to capture significant market share. Rybelsus’ label in the United States and the EU has been expanded to include cardiovascular benefits in diabetes patients. A 7.2 mg Wegovy dose, showing up to 25% weight loss in the STEP UP study, is under EU review. Label expansion is also being sought for Ozempic in treating peripheral artery disease in the United States and the EU.

NVO Expands Footprint in Rare Diseases and Liver Care

Beyond its GLP-1 portfolio, Novo Nordisk is broadening its presence in rare diseases. The company has submitted a regulatory filing seeking approval for Mim8 in hemophilia A in the United States. NVO has also secured both EU and U.S. approvals for Alhemo to treat hemophilia A and B, with or without inhibitors.

The FDA has also recently granted accelerated approval to Wegovy as the first GLP-1 therapy to treat noncirrhotic metabolic dysfunction-associated steatohepatitis with moderate-to-advanced liver fibrosis. This marked a significant milestone in liver care by offering patients a treatment that can both halt disease activity and reverse liver damage.

NVO Focuses on Next-Generation Drugs for Obesity

Novo Nordisk is also developing several next-generation obesity candidates in its pipeline, especially targeting the lucrative U.S. market. The most advanced weight loss candidate in Novo Nordisk’s pipeline is CagriSema, a fixed-dose combination of a long-acting amylin analog, cagrilintide, and Wegovy. The company is planning its regulatory submission in 2026. NVO is also gearing up to launch a dedicated late-stage program evaluating cagrilintide as a monotherapy for obesity.

Novo Nordisk is also developing a small-molecule oral CB1 inverse agonist, monlunabant, in a mid-stage study. The company is currently gearing up to advance amycretin, an investigational unimolecular GLP-1 and amylin receptor agonist, for weight management into late-stage development. The phase III program on amycretin is planned to be initiated during the first quarter of 2026. The company recently signed a $2.2 billion deal with Septerna for developing and commercializing oral small-molecule medicines for treating obesity, diabetes, and other cardiometabolic diseases.

NVO’s Stock Price, Valuation, Estimates

Year to date, Novo Nordisk shares have lost 43.9% against the industry’s 14% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

NVO Stock Underperforms the Industry, Sector & the S&P 500

Image Source: Zacks Investment Research

Novo Nordisk is trading at a discount to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 13.10 forward earnings, which is lower than 16.72 for the industry. The stock is trading much below its five-year mean of 29.25.

NVO Stock Valuation

Image Source: Zacks Investment Research

Earnings estimates for 2025 have deteriorated from $3.85 to $3.58 per share over the past 60 days. During the same time frame, Novo Nordisk’s 2026 earnings per share estimates have declined from $3.96 to $3.70.

NVO Estimate Movement

Image Source: Zacks Investment Research

Here’s How to Play NVO Stock

Novo Nordisk, currently carrying a Zacks Rank #4 (Sell), is under mounting pressure as U.S. demand for its GLP-1 drugs slows, competition from Eli Lilly intensifies, and its diabetes market share continues to slip. The mandated U.S. pricing reset starting in 2026 is set to squeeze margins further. NVO’s disappointing third-quarter results underscore these headwinds, leading to another guidance cut, which further clouds near-term visibility. The company’s plan to cut 9,000 jobs may help efficiency over time, but it also raises execution risk and signals the need for deeper cost discipline. Meanwhile, the agreement with the U.S. Administration, though likely to boost patient access to authentic semaglutide, intensifies uncertainty around long-term GLP-1 profitability at a time when compounded semaglutide alternatives and uneven international uptake remain unresolved challenges.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Competition in the obesity treatment market is intensifying as the space, projected by Goldman Sachs to reach $100 billion by 2030, attracts new contenders beyond leaders Eli Lilly and Novo Nordisk. Amgen (AMGN Quick QuoteAMGN - Free Report) and Viking Therapeutics (VKTX Quick QuoteVKTX - Free Report) are advancing GLP-1–based therapies to challenge the incumbents. Amgen has launched a broad phase III program for its dual GIPR/GLP-1 agonist, MariTide, targeting obesity and diabetes. Meanwhile, Viking Therapeutics is progressing two late-stage studies of its injectable VK2735 and reported mixed mid-stage data on the oral version in August, prompting a sharp stock decline.

From an investment standpoint, NVO offers few near-term catalysts to drive sustained growth in the coming quarters. While the pipeline is advancing and semaglutide retains strong clinical appeal, current challenges are likely to outweigh these strengths in the near term. The 2026 pricing reset, paired with slowing prescription trends and Lilly’s rapid market share gains, materially weakens NVO’s medium-term growth trajectory. Analysts also continue to trim earnings estimates, leaving valuations at risk of further downside. Until Novo Nordisk demonstrates renewed demand momentum, stabilizes market share, and shows that restructuring can meaningfully improve margins, investors would be better served by reducing exposure or selling the stock outright.