Revenue/GMV has declined! What should analysts do?

Every business analyst has likely faced a scenario like this: 'Revenue/GMV has declined—what should we do? Should we inform our boss? And if so, how?' So, what exactly should analysts do when revenue/GMV declines? I. First, determine *compared to when* the decline occurred. Was the decline month-on-month, year-on-year for the same month, year-on-year overall, or week-on-week? Comparing across timeframes helps preliminarily assess whether the decline stems from seasonal factors, holidays, sudden events, or weather—analysis must be grounded in your industry’s specific characteristics. For example, in the automotive industry, Q1 revenue declining month-on-month from Q4 is perfectly normal; in food delivery, GMV dropping week-on-week due to heavy rain is also typical; most companies saw revenue decline year-on-year from February–April 2020 versus 2019—a widely expected outcome; and in food & beverage, March revenue falling below February (post–Chinese New Year) is likewise routine. In such cases, there’s no need for alarm—only appropriate response planning is required. II. How large is the decline? What is the magnitude of the month-on-month or year-on-year drop? Compare it against historical data to determine whether the decline falls within normal business volatility—and whether it should trigger internal business alert mechanisms. If the decline constitutes abnormal volatility and triggers the alert mechanism, it warrants serious attention. III. Is the data accurate? If the fluctuation is substantial, first verify whether the data contains errors. If data integrity is confirmed, proceed to analyze future trends and identify root causes of the decline. IV. How will the data trend going forward? Based on current business momentum, how will performance evolve over the next 1–5 months? Will revenue/GMV continue to decline—or even deteriorate further? Forecasting future trends is essential. V. What caused the decline? 1. Look internally—identify internal drivers behind the decline using these approaches: (1) Formula decomposition Revenue/GMV = Number of buyers × Average order value × Purchase frequency → Determine whether the decline stems from fewer buyers, lower average order value, or reduced purchase frequency. (2) Vertical funnel breakdown If buyer count declined, break it down further: Buyer count = Traffic × Store-entry conversion rate × Cart-add conversion rate × Payment conversion rate → Identify which funnel stage experienced the drop. If traffic declined, prioritize user acquisition; if store-entry conversion dropped, focus on marketing campaigns, etc.

Novo Nordisk’s stock price has fallen consecutively—how should investors respond to this trend?

On September 21, Novo Nordisk CEO Mike Doustdar will face investors in London to address two pressing challenges: how to defend its weight-loss drug market share amid Eli Lilly’s aggressive pursuit, and what growth drivers will replace semaglutide once its patent expires. Against the backdrop of Novo Nordisk’s share price plunging over 70% from its peak—and with Lilly’s Zepbound projected to outpace Wegovy by more than $7 billion in sales this year—the market isn’t really asking how Novo Nordisk can fight back in weight-loss drugs. Instead, it wants to know: What comes *beyond* weight-loss? From European Market Cap Champion to a Company Under Scrutiny Wegovy’s 2021 launch catapulted Novo Nordisk to become Europe’s most valuable listed company, with its market cap peaking above $600 billion in 2023. But those halcyon days didn’t last. According to LSEG data, Lilly’s tirzepatide-based weight-loss drug Zepbound is expected to generate over $7 billion more in sales this year than Wegovy. In August, Novo Nordisk revised its full-year sales and operating profit growth guidance upward—to a range of 0% to −6%—from its prior forecast of −4% to −12%. Even after the revision, the outlook remains negative. Successor Pipeline Keeps Faltering The problem isn’t just current—it’s also about the handover. In February, CagriSema, the much-anticipated next-generation weight-loss candidate meant to succeed Wegovy, delivered underwhelming clinical data, triggering an immediate stock plunge. Later, development of ziltivekimab—a cardiovascular candidate in late-stage trials—was halted, further thinning Novo Nordisk’s late-stage pipeline. The only near-term product capable of holding the line is the oral version of Wegovy, where Novo Nordisk still holds a first-mover advantage over Lilly’s Foundayo. Yet analysts universally caution that semaglutide’s patent expires in the early 2030s—meaning the oral tablet is merely a temporary bulwark, incapable of averting the looming ‘patent cliff.’ Morningstar analyst Karen Andersen offered blunt advice: “Rather than pouring more money into CagriSema, Novo Nordisk should redirect resources toward zenagamtide—an earlier-stage candidate in its pipeline.” Investors Want Action, Not Slogans Markus Manns, portfolio manager at Union Investment—who holds shares in both Novo Nordisk and Eli Lilly—put it plainly: “The company must work harder to build a ‘third leg’ of growth. Relying solely on diabetes and obesity offers insufficient growth headroom; diversification into cardiovascular disease or rare diseases is essential.” He was even more direct about mergers and acquisitions: “They absolutely need to buy something. I don’t believe they have the internal capacity to achieve this alone.”

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