Company Overview - On Holding (ONON) is projected to have earnings of $0.95 per share and revenue of $2.56 billion for the entire year, reflecting increases of +143.59% and +28.38% compared to the previous year [1] - The company is currently rated 1 (Strong Buy) in the Zacks Rank system, which has shown an average annual return of +25% for 1 stocks since 1988 [2] Financial Performance - For the upcoming earnings release, On Holding's EPS is expected to be $0.19, indicating a 375% increase from the same quarter last year, with revenue projected at $623.44 million, a 26.15% increase year-over-year [6] - The company has a Forward P/E ratio of 42.34, which is significantly higher than the industry average Forward P/E of 15.01 [8] Market Position - On Holding's stock price recently closed at $39.83, showing a -0.97% change from the previous day, which is less than the S&P 500's daily gain of 0.08% [5] - Over the past month, shares of On Holding have gained 3.66%, while the Consumer Discretionary sector has lost 1.74% and the S&P 500 has lost 0.21% [10] Industry Context - The Leisure and Recreation Products industry, which includes On Holding, currently holds a Zacks Industry Rank of 219, placing it in the bottom 14% of over 250 industries [12] - The average PEG ratio for Leisure and Recreation Products stocks is 1.11, while On Holding's PEG ratio is 0.96, indicating a more favorable valuation relative to expected earnings growth [3]

Investors might want to bet on On Holding (ONON) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. ...

Investors should also take note of any recent adjustments to analyst estimates for On Holding. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits. The Leisure and Recreation Products industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 225, this industry ranks in the bottom 11% o ...

Investment Thesis - ONON is focusing on increasing brand recognition through innovative product designs and success in elite athletics, leveraging its "lightning and rain strategy" to broaden consumer adoption [1] - The company has a growing list of elite athletes endorsing its products, which is expected to enhance brand visibility, especially during the upcoming Summer Olympic Games in Paris [1][22] - ONON's footwear lineup has been updated, and the company is maintaining pricing discipline, evidenced by the absence of discounts in stores [1][5] - The company has significant growth potential, with expectations of maintaining stellar free cash flow growth and outpacing GDP growth rates in the long term [1][13] Market Position and Competitive Landscape - The athletic footwear and apparel market is highly competitive, with consumer preferences being volatile [1] - ONON's pricing power is demonstrated by its lack of discounting, contrasting with competitors like Under Armour and Hoka, which frequently run sales [5][25] - The company is currently a niche player but aims to expand into broader demographics and product categories to compete with larger shoemakers [1][5] Financial Performance and Projections - ONON has achieved a revenue growth rate of 58% CAGR and operating income growth of 124% CAGR since 2019, with free cash flow transitioning from a loss of 287.3 million Swiss francs in 2022 to a gain of 271.5 million in the TTM period [24] - The company turned profitable in 2022 and has been expanding its operating and free cash flow margins [8] - Future revenue growth is projected at 30% for 2024, with a gradual decline expected thereafter, while operating margins are anticipated to expand to 32% by 2034 [10][11][33] Product Development and Innovation - ONON's CloudTec technology is a key differentiator that could enhance its market position, similar to Hoka's trajectory from shoes to a complete apparel line [16] - The company is investing in marketing and product development to drive brand awareness and expand its offerings, particularly in the apparel segment, which currently contributes only 5% of revenue [25][5] Brand Recognition and Athlete Endorsements - The "lightning" aspect of ONON's strategy focuses on winning at elite levels, while the "rain" aspect aims to reach everyday athletes and casual consumers [28] - Notable athletes, including marathon winners and tennis champions, are endorsing ONON, which could significantly boost brand recognition during high-profile events like the Olympics [22][23] Valuation Metrics - ONON's current valuation appears high, with a forward P/E of 46x and a P/S of 4.8x, but its PEG ratio of 1.21 indicates strong earnings growth potential [26] - The company is modeled to achieve substantial free cash flow growth, which could justify its current valuations if growth targets are met [13][27]

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making. We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A highe ...

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions. The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.65% higher. As of now, On Holding holds a Zacks Rank of #3 (Hold). The running-shoe and appa ...

Company Overview - ON Holding (ONON) is positioned as a strong competitor in the consumer apparel space, particularly in the footwear and athleisure segments, with a focus on high-quality products and a unique brand identity [18][19][30]. - The company has experienced significant growth, with sales nearly tripling over the last two years while maintaining stable gross margins of nearly 60% [41][30]. Product Strategy - ONON's product offerings are centered around a patented cushioning system called 'Cloudtec', which emphasizes comfort and performance for athletes and casual users alike [30][19]. - The brand has successfully expanded its appeal beyond just athletic users, attracting a broader customer base that includes non-athletic consumers [3][20]. Marketing Approach - The company prioritizes brand-building over performance marketing, which is seen as a strategic advantage in the apparel industry [5][4]. - ONON's marketing strategy effectively targets its core user base of runners, fostering a strong brand loyalty that differentiates it from trend-driven competitors [40][15]. Operational Efficiency - ONON has demonstrated a history of positive operating margins and has optimized internal spending, contributing to its profitability [8][10]. - Management is focused on improving efficiencies in HR and marketing, which is expected to enhance margins further [34][45]. Financial Performance - The company is currently trading at a sales multiple of 5.3x and a net income multiple of approximately 89x, which is expected to decrease as profitability improves [11][14]. - For FY 2024, ONON is projected to achieve an EBITDA margin of 16%, translating to an EBITDA of $409 million based on anticipated sales of $2.5 billion [45][14]. Market Position - ONON is recognized as the fifth-largest company in the consumer apparel space, significantly ahead of traditional competitors like Ralph Lauren and Under Armour [17][18]. - The brand's unique positioning and operational expertise suggest it could rival established players like Nike and Lululemon in the long term [50][15].

Group 1 - Wall Street analysts' recommendations significantly influence investors' decisions on stock transactions, with 79% classified as Strong Buy and 5.3% as Buy for On Holding [1][4] - The average brokerage recommendation (ABR) for On Holding is 1.42, indicating a position between Strong Buy and Buy on a scale of 1 to 5 [4] - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, often issuing more favorable recommendations than warranted [7][13] Group 2 - The Zacks Rank differs from the ABR as it is based on earnings estimate revisions, which are closely correlated with near-term stock price movements [8][14] - The Zacks Consensus Estimate for On Holding remains unchanged at $0.95 for the current year, leading to a Zacks Rank of 3 (Hold) [10][11] - Using the ABR to validate the Zacks Rank may provide a more effective approach for making investment decisions [14][19]

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions an ...

The Swiss running shoe maker is quickly making a name for itself. Investors are always looking for the next big thing, but investing before a company has a proven track record can come with a lot of risk. On occasion, you can find a stock with huge opportunities that's still in its early growth stages but has already demonstrated enough success for investors to be confident about where it's going. That's what's happening with On Holding (ONON 4.04%). The Swiss company exploded onto the activewear scene with ...