On Holding (NYSE:ONON) Valuation Under Focus Following Executive Changes and Market Reassessment

On Holding (NYSE:ONON) is under the spotlight as its stock has slipped over the past month, which has triggered renewed investor caution. Recent executive team changes and shifting trends in athletic apparel are also fueling questions about the company’s future direction.

See our latest analysis for On Holding.

In the bigger picture, On Holding’s share price momentum has clearly cooled in recent months. This reflects a shift in market sentiment after a year filled with changing consumer trends and executive reshuffling. While the 1-year total shareholder return remains negative, strong revenue and profit growth still point to potential that investors may be overlooking, especially with the stock now trading well below analyst expectations.

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With shares trading well below analyst targets, but growth prospects still in play, the pressing question is whether On Holding is undervalued or if the market has already priced in all the potential upside.

Most Popular Narrative: 36.9% Undervalued

With On Holding closing at $42.10 and a consensus fair value near $66.76, market pessimism stands out compared to persistent analyst optimism. The gap sets up a story powered by big growth assumptions and ambitious expansion plans.

The acceleration in DTC (Direct-to-Consumer) and e-commerce channels, with DTC reaching new highs (41.1% of sales in Q2 and up 54% year-over-year), gives On more control over brand, pricing, and customer data. This also increases gross and EBITDA margins, making it an operational catalyst that is likely to further expand profitability as DTC continues its mix shift.

Read the complete narrative.

Curious what transformation fuels this sky-high fair value? Hear how bold bets on international growth, margin leaps, and product launches could redefine On’s future. The specifics behind these projections might surprise you. What’s the secret sauce that sets this price apart? You’ll want to see the full calculation for yourself.

Result: Fair Value of $66.76 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks such as slowing consumer demand or challenges from heavy reliance on premium pricing could quickly shift On Holding’s growth trajectory and valuation outlook.

Find out about the key risks to this On Holding narrative.

Another View: What Do the Ratios Reveal?

While the fair value approach suggests On Holding is undervalued, things look different through the lens of its price-to-earnings ratio. At 80.5x, On trades dramatically above both its industry average (21.3x) and the estimated fair ratio (33x), signaling stretched expectations. Does this premium reflect future growth, or set investors up for a correction?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own On Holding Narrative

If you see things differently or want to dig into the numbers on your own terms, it’s quick and easy to build your own perspective. Just Do it your way.

A great starting point for your On Holding research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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