Novo Nordisk’s Q4 2024 Results Blow Away Investors: Is the Growth Sustainable?

TradingKey - In the fast-growing world of weight-loss drugs, there’s no company bigger than Novo Nordisk A/S (NYSE: NVO). The Danish company just delivered another blockbuster earnings report, and investors are sitting up and taking notice. 

Novo Nordisk’s diabetes and weight-loss drugs, namely Wegovy and Ozempic, are driving massive growth – pushing revenue up by 30% year-on-year. 

With strong demand and an ambitious outlook for 2025, Novo Nordisk is cementing its position as a leader in the booming weight-loss drug market. But can this momentum last? Here’s everything investors need to know about Novo Nordisk’s latest impressive numbers.

Revenue surged amid strong demand

Novo Nordisk pulled in DKK 85.7 billion (US$12.3 billion) in revenue for Q4 204 and this was mainly fuelled by strong demand for its GLP-1-based treatments for diabetes and obesity. The company’s full-year revenue reached DKK 290.4 billion, growing 26% year-on-year.

That impressive top-line growth was backed by red-hot demand for weight-loss drug Wegovy, which generated DKK 19.9 billion in sales for the quarter. That was more than double from the same period last year. 

Novo Nordisk’s Wegovy sales power ahead – Q1 2023 to Q4 2024 (DKK billions)

Source: Bloomberg, company filings

This reflects the staying power of – as well as increasing demand for – weight-loss treatments, with doctors now more commonly prescribing GLP-1 drugs for obesity management.

The company expects revenue growth of 16-24% and operating profit growth of 19-27% in 2025, with capital expenditures around DKK 65 billion.

TradingKey analyst Frank Li notes that despite fluctuations in revenue growth, the expansion of the GLP-1 market presents a long-term opportunity. Although facing competitive pressure from Eli Lilly (LLY), Novo Nordisk still anticipates an average annual revenue growth of around 15%.

Diabetes drug sales remain strong, margins rise

Sales from Novo Nordisk’s diabetes and obesity care segment increased 30% year-on-year to DKK 80 billion. GLP-1 diabetes drug sales alone contributed DKK 42.2 billion, growing at 12% year-on-year.

The company’s operating margin rose to 43%, up from 41% a year ago. This improvement in profitability came despite increased R&D spending and supply chain investments. Operating profit for Q4 2024 jumped 37% year-on-year to DKK 36.7 billion, exceeding analyst expectations.

Big dividends for investors and strong 2025 outlook

This increased operating cash flow also allowed Novo Nordisk to announce a 21% increase in its total dividend for 2024. That brings its total payout to DKK 11.40 per share. 

This marks the 29th consecutive year of dividend growth, reinforcing the company’s commitment to rewarding shareholders via capital returns.

For the whole of 2025, Novo Nordisk expects year-on-year sales growth of 16% to 24% at constant exchange rates, primarily driven by continued demand for its weight-loss and diabetes treatments.

Operating profit is projected to grow 19% to 27% year-on-year, though supply chain challenges could impact the company's ability to meet the booming demand for its drugs.

What to watch for investors

Despite its strong momentum, there are challenges ahead that investors should keep an eye on. One of the big ones is supply chain constraints as demand for Wegovy and Ozempic is skyrocketing but production capacity is still trying to catch up. Any supply issues could limit sales growth for Novo Nordisk in the short term.

With obesity and diabetes drugs becoming more widely used, governments and insurers may also be more willing to push back on high prices, especially in the US where regulatory changes could impact profitability.

Eli Lilly Co (NYSE: LLY), a key competitor in the GLP-1 space, is scaling up production and expanding the reach of its weight-loss drug Mounjaro. If Novo Nordisk fails to expand its own supply and maintain its competitive edge, it could lose market share but – at this point in time – there seems to be plenty of room for both companies to prosper.

Is Novo Nordisk stock still a buy?

The global weight-loss drug market is projected to exceed US$100 billion by 2030 and Novo Nordisk has firmly positioned itself as a market leader in both obesity and diabetes treatments. 

Strong sales have driven robust financial growth but the company’s long-term success will hinge on its ability to expand production, outpace rising competition, and sustain pricing power. 

For long-term investors, Novo Nordisk remains an attractive growth stock, yet regulatory pressures and competitive threats should definitely be carefully monitored. As the obesity drug market continues to grow, Novo Nordisk’s dominance isn’t fading anytime soon yet the road ahead could be bumpy.