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On Holding AG (ONON)
NYSE:ONON
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On Holding AG
(NYSE:ONON)
75Outperform
Positive Factors
Financial Performance
On became free cash flow positive and grew its free cash flow, ending with a net cash position with significant cash and no debt.
Growth Strategy
Analysts believe management is building a durable growth strategy, leading to naming it as a top idea for future years.
Leadership
The company announced four key leadership hires, including a chief people officer (coming from Spotify), chief innovation officer (Specialized, Dyson), chief communications officer (Axel Springer), and chief supply officer (Levi’s).
Negative Factors
Growth Challenges
Growth is slowing to half of prior CAGR, retailers committing to more NKE presents novel pressure, and apparel/accessories impact is minimal at best.
Retail Pressure
With retailers now recommitting to NKE, On may face challenges in securing additional shelf and open-to-buy, further curbing its momentum.
Valuation Concerns
Macro uncertainty means it's less likely that ONON can reach the valuation multiples previously embedded in the price target.
On Holding AG (ONON) vs. S&P 500 (SPY)
Market Cap
$12.83B
Dividend YieldN/A
Average Volume (3M)6.03M
Price to Earnings (P/E)46.3
Beta (1Y)1.27
Revenue Growth31.95%
EPS Growth209.45%
CountryUS
Employees3,254
SectorConsumer Cyclical
Sector Strength60
IndustryApparel - Retail
Share Statistics
EPS (TTM)0.85
Shares Outstanding289,296,360
10 Day Avg. Volume7,658,241
30 Day Avg. Volume6,034,050
Financial Highlights & Ratios
PEG Ratio0.22
Price to Book (P/B)N/A
Price to Sales (P/S)11.19
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$63.38Price Target Upside60.01% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering22
On Holding AG Business Overview & Revenue Model
Company DescriptionOn Holding AG develops and distributes sports products worldwide. It offers athletic footwear, apparel, and accessories. The company offers its products through independent retailers and distributors, online, and stores. On Holding AG was founded in 2010 and is headquartered in Zurich, Switzerland.
How the Company Makes MoneyOn Holding AG generates revenue primarily through the sale of its branded footwear and apparel products. The company's business model is centered around direct-to-consumer sales through its e-commerce platform, as well as wholesale distribution to various retail partners across the globe. Key revenue streams include the sales of running shoes, which incorporate proprietary technology to enhance performance. Additionally, On has strategic partnerships and sponsorships with athletes and sports teams, contributing to brand visibility and growth. The company's focus on innovation and quality helps maintain a competitive edge, driving revenue through consumer loyalty and expansion into new markets.
On Holding AG Financial Statement Overview
Summary
On Holding AG exhibits a solid financial performance with significant revenue growth and improved profitability. The balance sheet remains robust with low leverage, while cash flow metrics indicate efficient cash management. The company is on a positive trajectory, although attention to liability growth is advisable to maintain financial stability.Income Statement
On Holding AG has demonstrated robust revenue growth from $267.1M in 2019 to $2.32B in 2024, showcasing a strong upward trajectory. The gross profit margin has improved significantly, reflecting effective cost management. The net profit margin has turned positive, growing from a loss in 2019 to a net income of $242.3M in 2024, indicating enhanced profitability. EBIT and EBITDA margins have also shown improvement, further underlining operational efficiency.85
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with a strong equity position. The debt-to-equity ratio remains low due to a substantial equity base of $1.39B in 2024, reflecting low leverage risk. The equity ratio has improved, indicating financial stability. However, the increase in total liabilities warrants monitoring to ensure continued financial health.78
Positive
Cash Flow
Operating cash flow has seen substantial growth, reaching $510.6M in 2024 from negative values in prior years, highlighting improved cash generation capabilities. Free cash flow has also turned positive, indicating better cash utilization and financial health. The operating cash flow to net income ratio suggests efficient cash management practices.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.32B | 1.79B | 1.22B | 724.60M | 425.30M | Gross Profit |
| 1.41B | 1.07B | 684.90M | 430.30M | 231.10M | EBIT |
| 211.60M | 180.20M | 85.10M | -141.10M | -17.10M | EBITDA |
| 400.00M | 141.00M | 128.60M | -125.80M | -12.00M | Net Income Common Stockholders |
| 242.30M | 79.60M | 57.70M | -170.20M | -27.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 980.60M | 512.40M | 404.20M | 683.13M | 107.78M | Total Assets |
| 2.38B | 1.59B | 1.38B | 1.24B | 382.57M | Total Debt |
| 347.60M | 229.00M | 160.40M | 180.86M | 23.73M | Net Debt |
| -576.70M | -265.60M | -210.60M | -472.22M | -66.91M | Total Liabilities |
| 984.90M | 518.50M | 412.80M | 388.14M | 137.48M | Stockholders Equity |
| 1.39B | 1.07B | 969.60M | 848.38M | 245.09M |
| Cash Flow | Free Cash Flow | |||
| 445.60M | 184.90M | -310.00M | -19.30M | -33.33M | Operating Cash Flow |
| 510.60M | 232.10M | -227.00M | 16.95M | -14.73M | Investing Cash Flow |
| -64.90M | -47.10M | -82.90M | -36.44M | -18.62M | Financing Cash Flow |
| -55.40M | -21.80M | 6.30M | 595.90M | 124.80M |
On Holding AG Technical Analysis
Negative
39.61
Price Trends
50.15
Negative
53.23
Negative
48.86
Negative
Market Momentum
-1.80
Positive
35.20
Neutral
21.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONON, the sentiment is Negative. The current price of 39.61 is below the 20-day moving average (MA) of 45.01, below the 50-day MA of 50.15, and below the 200-day MA of 48.86, indicating a bearish trend. The MACD of -1.80 indicates Positive momentum. The RSI at 35.20 is Neutral, neither overbought nor oversold. The STOCH value of 21.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ONON.
On Holding AG Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $12.83B | 46.34 | 19.62% | ― | 31.95% | 209.45% | |
75 Outperform | $33.16B | 17.91 | 42.42% | ― | 10.07% | 20.40% | |
73 Outperform | $7.17B | 8.70 | 28.81% | 3.14% | 1.32% | 65.83% | |
71 Outperform | $2.99B | 17.46 | 17.27% | ― | 8.31% | 3.96% | |
67 Neutral | $1.89B | 6.52 | 18.80% | 4.57% | 1.27% | 96.32% | |
59 Neutral | $11.18B | 10.04 | -1.58% | 3.96% | 1.31% | -16.97% | |
55 Neutral | $1.20B | 101.06 | 0.62% | ― | -2.20% | ― |
* Consumer Cyclical Sector Average
Performance Comparison
ONON
On Holding AG
40.97
8.40
25.79%
AEO
American Eagle
10.35
-13.47
-56.55%
FL
Foot Locker
12.41
-11.43
-47.94%
GAP
Gap Inc
18.70
-4.17
-18.23%
BOOT
Boot Barn
99.54
-1.46
-1.45%
LULU
Lululemon Athletica
265.00
-95.46
-26.48%
On Holding AG Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -17.22% | Next Earnings Date: May 20, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance for On Holdings AG with significant growth across multiple segments and regions. While there were operational challenges and some concerns about economic conditions, the highlights significantly outweigh the lowlights, indicating a positive sentiment.Highlights
Record Net Sales Growth
On Holdings AG reported a constant currency growth rate of over 33%, reaching CHF 2.32 billion in net sales for 2024.
Strong D2C Channel Expansion
The company expanded its D2C share by more than 3 percentage points, contributing to premium margins with a gross profit margin of 60.6%.
Apparel Segment Milestone
On Holdings AG achieved more than CHF 100 million in net sales from apparel, with the category growing 51% in constant currency terms.
APAC Region Growth
APAC net sales grew by 117.5% on a reported basis and 124.6% on a constant currency basis, driven by strong performance in Japan and China.
Expansion of Retail Footprint
In 2024, On Holdings opened 19 new retail stores in iconic locations, enhancing brand visibility and regional awareness.
Positive Cash Flow and Profitability
Operating cash flow reached CHF 510.6 million, with a total cash balance of CHF 924.3 million at the end of the year.
Lowlights
Operational Challenges in Atlanta
The company faced operational disruptions at its Atlanta warehouse, affecting distribution efficiency and incurring potential incremental costs during ramp-up.
Apparel Segment Lagging Behind
Despite strong growth, the apparel segment is slightly behind midterm expectations, indicating room for improvement.
Macro-Economic Environment Concerns
The company expressed caution regarding the macroeconomic environment, potentially impacting future growth projections.
Company Guidance
During the On Holdings AG Q4 and Fiscal Year 2024 results call, the company provided a positive outlook for 2025, expecting to achieve a constant currency growth rate of at least 27%, translating to CHF 2.94 billion in net sales. The guidance reflects an anticipated gross profit margin of approximately 60.5% and an adjusted EBITDA margin between 17% and 17.5%, showcasing ongoing financial strength. The call highlighted On's strategic focus on expanding its premium brand presence globally, particularly in China, increasing its D2C share, and leveraging partnerships with high-profile talents like Zendaya and Roger Federer. The company plans significant investments in operational excellence, including warehouse automation in Atlanta, to support future growth. The call also emphasized On's commitment to innovation and sustainability, with plans to launch new products, such as the Cloudboom Max, and expand its retail presence, especially in emerging markets.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.