Shares of Ozempic-maker Novo Nordisk (NYSE:NVO) have been nosediving in recent weeks. And in the past three months, the stock is down around 17%. Last week, it closed at just over $115 as it inches closer to its 52-week low of $90.50.
The sell-off has been significant enough for the stock to fall into oversold territory, with a Relative Strength Index (RSI) of 29. The RSI measures a stock’s recent trading momentum, covering the past 14 trading days. When there’s a lot of selling, the RSI index goes lower and once it falls below 30, the stock is considered oversold. This is the only time in the past year where Novo Nordisk stock has gone oversold.
For investors, this could be an opportune time to invest in the top drugmaker. Novo Nordisk is trading at a forward price-to-earnings multiple of 28, which is lower than where it has been in the past.
Meanwhile, there’s still a lot of growth on the horizon for the business, especially as it rolls out its weight loss drug, Wegovy, to more international markets. Through the first half of 2024, the company’s sales have risen by 25% (at constant exchange rates) and its operating profits are up by 19%. Novo Nordisk is still in excellent position to continue growing its top and bottom lines, and that means its valuation can look even better, especially if its share price continues to fall under pressure.
For long-term investors, Novo Nordisk can make for an extremely attractive stock to own given its leadership in the anti-obesity market.