On Holding AG (ONON) AI Stock Analysis

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On Holding AG

(NYSE:ONON)

Rating:73Outperform

Price Target:

$59.00

▲(8.78%Upside)

On Holding AG scores well due to robust financial performance and a positive earnings call outlook, highlighting substantial sales growth and operational efficiency. However, technical indicators are mixed, and a high P/E ratio suggests potential overvaluation, which tempers the overall score.

Positive Factors

Market Positioning

ONON maintains a strong position in a favorable sportswear market, which supports an Overweight rating.

Product Innovation

Strong uptake on the revamped Cloud 6, the biggest launch in On's history, despite a $10 higher price point.

Sales Growth

The company raised its full-year constant currency growth guidance, indicating confidence in ongoing sales growth.

Negative Factors

Financial Performance

The operational earnings rise should be more than offset by higher non-cash financial charges, leading to a halving of the net earnings yoy.

Inventory Levels

On expects inventory levels to be a bit higher at the end of Q2 than current levels.

Investor Concerns

Investor anxieties have not changed, centered mostly on the sustainability of growth and how much of On’s success is fleeting.

On Holding AG (ONON) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$17.31B

Dividend YieldN/A

Average Volume (3M)5.02M

Price to Earnings (P/E)73.2

Beta (1Y)1.48

Revenue Growth34.75%

EPS Growth60.65%

CountryUS

Employees3,254

SectorConsumer Cyclical

Sector Strength65

IndustryApparel - Retail

Share Statistics

EPS (TTM)0.26

Shares Outstanding289,296,360

10 Day Avg. Volume4,374,713

30 Day Avg. Volume5,017,732

Financial Highlights & Ratios

PEG Ratio-4.22

Price to Book (P/B)9.87

Price to Sales (P/S)0.00

P/FCF Ratio40.15

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$66.79

Price Target Upside23.14% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering20

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 athletic footwear and apparel. The company sells its products through a combination of direct-to-consumer channels, including its online store and flagship retail locations, as well as through wholesale distribution channels, which include third-party retailers and specialty stores globally. On Holding AG leverages its brand partnerships and endorsements from professional athletes to enhance its market presence and drive sales. Additionally, the company's focus on innovation and patented technology in its product offerings helps to maintain a competitive edge and attract a loyal customer base, contributing to its financial performance.

On Holding AG Key Performance Indicators (KPIs)

Any

Revenue by Distribution Type

Revenue by Distribution Type
Examines revenue from various sales channels, such as direct-to-consumer and wholesale, providing insight into distribution strategy effectiveness and potential shifts in consumer purchasing behavior.

Chart InsightsON Holding AG's revenue from both wholesale and direct-to-consumer channels has shown robust growth, with the latter now representing a significant portion of total sales. The latest earnings call highlights a 45.3% year-over-year increase in D2C sales, reflecting strategic emphasis on this channel. Despite potential challenges from tariffs and currency fluctuations, the company remains optimistic, projecting a 28% growth in 2025. This growth is underpinned by strong brand momentum, successful product launches, and a focus on premium positioning and operational efficiency.

Data provided by:

Main Street Data

On Holding AG Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q1-2025)

% Change Since: 5.71%|

Next Earnings Date:Aug 19, 2025

Earnings Call Sentiment Positive

The earnings call presents a very positive outlook with significant growth in net sales and profitability, driven by strong D2C and apparel performance. While there are challenges related to tariffs and foreign exchange volatility, the overall sentiment remains optimistic due to strong brand momentum and successful product launches.

Q1-2025 Updates

Positive Updates

Record-Breaking Net Sales

Net sales exceeded CHF725 million, reflecting a year-over-year growth of 40% on a constant currency basis.

Increased Gross Profit Margin

Gross profit margin increased to 59.9%, up from 59.7% in Q1 2024, driven by the strength of the direct-to-consumer business.

Strong Performance in Asia Pacific

Net sales in Asia Pacific grew by 130.1% on a reported basis to CHF120.6 million, with China achieving the strongest growth across the region.

Apparel Net Sales Surge

Apparel net sales reached CHF38.1 million, the highest quarterly net sales in history, increasing by 93.1% year-over-year.

Successful Product Launches

Cloudsurfer 2 and Cloud 6 launches were highly successful, with Cloud 6 setting a record as the largest product launch ever.

D2C Channel Growth

The direct-to-consumer channel grew by 45.3% year-over-year on a reported basis, reaching CHF276.9 million.

Strong Cash Position

Cash position was CHF871.8 million at the end of Q1, maintaining a robust financial standing.

Negative Updates

Challenges with Tariffs and FX

Potential incremental tariffs in the United States and volatile foreign exchange rates introduce uncertainty into planning.

Decreased Cash Position

Cash position decreased from CHF924.3 million at the end of 2024 to CHF871.8 million at the end of Q1 2025.

Company Guidance

During the ON Holding AG Q1 2025 results conference call, the company provided optimistic guidance for the fiscal year. Net sales exceeded CHF 725 million, marking a 40% year-over-year growth on a constant currency basis, and the company increased its constant currency growth outlook for 2025 to at least 28%, with projected net sales reaching at least CHF 2.8 billion. The adjusted EBITDA margin reached 16.5% in the first quarter, driven by a strong direct-to-consumer (D2C) performance and an increased gross profit margin of 59.9%. The D2C channel, which grew by 45.3% year-over-year, now represents 38.1% of total sales. The wholesale business also showed robust performance with a 41.5% increase. By region, Asia Pacific led the growth with a 130.1% increase. Looking ahead, ON Holding emphasized its focus on premium positioning, innovation, and operational efficiency, acknowledging potential uncertainties from tariffs and currency fluctuations.

On Holding AG Financial Statement Overview

Summary

On Holding AG exhibits 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. Attention to liability growth is advised to maintain financial stability.

Income Statement

Very Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Very Positive

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.54B	2.32B	1.79B	1.22B	724.60M	425.30M
Gross Profit	1.54B	1.41B	1.07B	684.90M	430.30M	231.10M
EBITDA	353.70M	400.00M	141.00M	128.60M	-125.80M	-12.00M
Net Income	207.60M	242.30M	79.60M	57.70M	-170.20M	-27.50M
Balance Sheet
Total Assets	2.42B	2.38B	1.59B	1.38B	1.24B	382.57M
Cash, Cash Equivalents and Short-Term Investments	913.70M	980.60M	512.40M	404.20M	683.13M	107.78M
Total Debt	338.00M	347.60M	229.00M	160.40M	180.86M	23.73M
Total Liabilities	961.40M	984.90M	518.50M	412.80M	388.14M	137.48M
Stockholders Equity	1.46B	1.39B	1.07B	969.60M	848.38M	245.09M
Cash Flow
Free Cash Flow	342.45M	445.60M	184.90M	-310.00M	-19.30M	-33.33M
Operating Cash Flow	410.04M	510.60M	232.10M	-227.00M	16.95M	-14.73M
Investing Cash Flow	-67.90M	-64.90M	-47.10M	-82.90M	-36.44M	-18.62M
Financing Cash Flow	-54.30M	-55.40M	-21.80M	6.30M	595.90M	124.80M

On Holding AG Technical Analysis

Technical Analysis Sentiment

Positive

Last Price54.24

Price Trends

50DMA

54.96

Negative

100DMA

50.28

Positive

200DMA

52.23

Positive

Market Momentum

MACD

-0.20

Negative

RSI

53.10

Neutral

STOCH

56.74

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONON, the sentiment is Positive. The current price of 54.24 is above the 20-day moving average (MA) of 52.93, below the 50-day MA of 54.96, and above the 200-day MA of 52.23, indicating a neutral trend. The MACD of -0.20 indicates Negative momentum. The RSI at 53.10 is Neutral, neither overbought nor oversold. The STOCH value of 56.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ONON.

On Holding AG Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BOOT	77 Outperform	$5.12B	28.84	17.44%	―	14.64%	21.68%
ONON	73 Outperform	$17.31B	73.18	15.84%	―	34.75%	60.65%
GAP	71 Outperform	$7.72B	9.02	29.16%	3.26%	1.07%	28.03%
LULU	67 Neutral	$28.26B	15.92	42.49%	―	9.39%	17.28%
AEO	64 Neutral	$1.70B	10.29	12.19%	5.09%	-0.95%	-10.51%
Sector *	64 Neutral	£1.68B	10.24	6.12%	3.34%	0.55%	-32.84%
FL	55 Neutral	$2.38B	194.63	-12.85%	―	-2.62%	0.93%

* Consumer Cyclical Sector Average

Performance Comparison

ONON

On Holding AG

54.24

14.18

35.40%

AEO

American Eagle

10.06

-9.03

-47.30%

Foot Locker

25.12

-0.24

-0.95%

GAP

Gap Inc

20.34

-1.63

-7.42%

BOOT

Boot Barn

169.11

49.48

41.36%

LULU

Lululemon Athletica

233.31

-46.93

-16.75%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 15, 2025