Novo Nordisk Q2 Preview: Still a Leader, But Cracks Are Showing

Novo Nordisk ($NVO) is set to report its Q2 2025 earnings before market open on August 6, and there’s no shortage of things for investors to watch. Wall Street is expecting revenue of $11.79 billion and earnings of $0.93 per share. But beyond the top-line numbers, the real story is about momentum — or the lack thereof.

Mixed Expectations Going In

On the surface, the business remains strong. Preliminary results already show an 18% sales increase and a 40% jump in operating profit at constant exchange rates, largely due to a favorable comparison from an impairment charge last year. Demand for Novo’s semaglutide-based drugs—Wegovy, Ozempic, and Rybelsus—continues to support growth, especially as obesity and diabetes treatments stay in high demand globally.

But underneath that strength is a more complicated picture.

Guidance Cut Raises Red Flags

Just last week, Novo slashed its 2025 sales and profit growth guidance. It now expects sales to grow 8-14%, down from 13-21%, and operating profit growth was also trimmed from 16-24% to 10-16%. The main drag? Wegovy’s weaker-than-expected uptake in the U.S., and persistent competition—not only from big pharma rivals but also from compounded GLP-1 knockoffs still floating around the market despite recent FDA crackdowns.

Novo has also faced delays in scaling up access via partnerships like Hims & Hers, which it recently ended, further stalling the obesity market rollout.

Competitive Pressures Are Mounting

Novo’s longtime rival Eli Lilly ($LLY) has been making serious inroads. Zepbound and Mounjaro—its dual-purpose GLP-1 drugs—are outperforming Wegovy in clinical studies, and gaining both attention and prescriptions. Lilly’s recent phase III success with its oral GLP-1 candidate adds another competitive layer—an edge Novo may struggle to match in the short term.

Other players like Amgen and Viking Therapeutics are also pushing into the GLP-1 space with promising late-stage candidates. The obesity drug landscape is no longer just a Novo vs. Lilly story—it’s getting more crowded and more competitive by the month.

Valuation: A Silver Lining?

Interestingly, despite the selloff, the stock now trades at just 11.87x forward earnings, well below its five-year average of 29.25 and under the industry average of 14.28. That’s a steep discount for a company that still holds the global lead in obesity care. For long-term investors, this could be a potential entry point—but only if you're comfortable with the near-term uncertainty.

Leadership Change Doesn’t Help

The departure of CEO Lars Fruergaard Jørgensen amid all these headwinds doesn’t exactly instill confidence. Leadership transitions are always tricky, and in a high-stakes environment like this, they can compound market concerns.

Bottom Line

Heading into earnings, NVO is still a heavyweight in diabetes and obesity care, but its once-dominant position is starting to look more vulnerable. Rising competition, slower-than-expected drug adoption, ongoing legal and regulatory battles, and internal pipeline setbacks like the disappointing CagriSema data are putting pressure on growth—and on investor patience.

For now, cautious investors may want to stay on the sidelines or limit exposure. While the long-term story around obesity and rare diseases is still intact, near-term volatility could persist until Novo can demonstrate renewed momentum in both product uptake and pipeline progress.