Novo Nordisk has, in recent years, posted record profits, paid hefty dividends, and repurchased shares consistently. This has resulted in the share price rising to historic highs, with the stock having outperformed the S&P 500 by more than 3x in the past 3 years. NVO has, however, become significantly overvalued, and investors may be wondering whether its time to head for the exits. NVO's obesity drug Wegovy could be highly successful, given the prevalence of obesity in the US and globally and the favorable economics of producing and marketing the drug. The massive market opportunities alongside the ongoing market share gain should continue to drive meaningful growth. $Novo-Nordisk A/S(NVO)$//@Tiger_comments:
One essential topic about weight loss is “exercise,” yet for many, it's difficult to insist.
Nowadays, “weight loss pills” that don't require exercise, dieting, or surgery are gaining unprecedented attention.
Due to the popularity of the weight loss drug Tirzepatide, $Eli Lilly(LLY)$ stock price surged over 75% in the past year, surpassing $Johnson & Johnson(JNJ)$ in market value.
Meanwhile, fitness equipment giant $Peloton Interactive, Inc.(PTON)$ is facing a significant challenge. Back in pandemic periods, its market value soared to nearly $50 billion, but now it has plummeted to less than $2 billion.
The market seems to have made a choice between "lying down" weight loss and "fitness" weight loss.
1. $Eli Lilly(LLY)$ Weight Loss Drugs Tirzepatide Continue to Drive Sales Up
Lilly is making rapid progress in the field of weight loss.
Tirzepatide is a dual-target (GIP/GLP-1) receptor agonist developed by Lilly. By suppressing patients' appetites and increasing energy expenditure, it effectively reduces patients' weight.
In the first half of this year, Tirzepatide's sales reached $1.55 billion, with second-quarter sales hitting $980 million, a 72% increase from the previous quarter. Lilly has also raised its annual sales projection for Tirzepatide to $4 billion.
With the anticipated effectiveness of this weight loss drug, Lilly has become the most valuable pharmaceutical company globally. Competitors such as $Novo-Nordisk A/S(NVO)$ , $Pfizer(PFE)$ , $AstraZeneca PLC(AZN)$ , and $Amgen(AMGN)$ are also vying in this arena. The global weight loss drug market is projected to reach a capacity of $150 billion by 2031.
This impressive financial report has shown investors a highly promising path in the weight loss field. However, whether the capital market is overly optimistic may be a concern for investors at this point.
2. Fitness Giant $Peloton Interactive, Inc.(PTON)$ Falls and Reports Wider Losses
While "miracle weight loss drugs" shine as a prominent investment theme, the once-thriving $Peloton Interactive, Inc.(PTON)$ has fallen.
Founded in 2012, Peloton focuses on home fitness and offers a proprietary interactive stationary bike as its core product. In 2020, the work-from-home trend pushed Peloton's market value to $50 billion.
However, with the end of the remote work era, Peloton's stock price plummeted.
Following the frenzy of 2020, Peloton's stock price experienced fluctuations and declines throughout 2021. The latest quote is $5.41 per share, a decrease of over 97% from its historical high of $171.09 per share.
In the latest earnings, the fitness company posted a wider loss than expected and led to a 22% drop in Peloton's shares.
EPS: -68 cents vs. -38 cents expected
Revenue: $642.1 mln vs. $639.9 mln expected
The company attributed the drop in new subscribers to the recall of its Bike seat post and seasonality.
At the same time, Peloton anticipates Q1 2024 revenue between $580 million and $600 million, below analysts' consensus of $647.8 million. The company also stated that due to the seasonal nature of hardware product sales, inventory payment times, and marketing expenses, positive free cash flow is no longer expected in the next two quarters.
How will you choose: "Lying down" weight loss pills or "exercise" - buy fitness equipment?
Which stock are you bullish on?
Leave your comments and repost to win tiger coins!
Weight Loss: Lying Down or Exercise? Market Choice is $LLY!
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