Core Insights - Investors in the Retail - Apparel and Shoes sector may consider Ermenegildo Zegna N.V. (ZGN) or On Holding (ONON) as potential undervalued stocks [1] Group 1: Company Rankings and Earnings Outlook - ZGN has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while ONON has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank emphasizes stocks with positive revisions to earnings estimates, suggesting ZGN has an improving earnings outlook [3] Group 2: Valuation Metrics - ZGN's forward P/E ratio is 20.01, significantly lower than ONON's forward P/E of 54.98 [5] - ZGN has a PEG ratio of 2.05, while ONON's PEG ratio is 2.61, indicating ZGN may be more favorably valued in terms of expected earnings growth [5] - ZGN's P/B ratio is 3.34 compared to ONON's P/B of 15.56, further highlighting ZGN's relative valuation advantage [6] Group 3: Value Grades - Based on various valuation metrics, ZGN holds a Value grade of B, whereas ONON has a Value grade of F, suggesting ZGN is the better option for value investors [6]

Core Insights - The running shoe segment has become a focal point for both emerging and traditional sports brands, with significant growth driven by consumer interest in health and fitness post-pandemic [1][2][6] Group 1: Market Performance - Nike's running business achieved a 20% global growth in Q1 of FY2026, with strong consumer response to new products like the top-tier Flyknit and React Infinity [2] - Salomon's footwear segment saw a 35% year-on-year revenue increase to $414 million in Q2 2025, marking it as the fastest-growing segment among its three main categories [2] - On's net sales rose by 32% to 749 million Swiss francs in Q2 2025, with the Asia-Pacific market showing a remarkable 114.8% sales increase [4] Group 2: Consumer Trends - The rise in running shoe popularity is linked to a broader trend of health consciousness among middle-class consumers, with running being an accessible form of exercise [1][6] - High-priced running shoes are becoming status symbols, akin to luxury items, as consumers seek to showcase their commitment to health and fitness on social media [6][9] Group 3: Competitive Landscape - Brands like Lululemon and Arc'teryx are diversifying into running shoes, indicating that capturing the running market is essential for growth across various sports categories [7][11] - High profit margins in the running shoe market are evident, with On achieving a gross margin of 61.5%, significantly above the industry average [9] Group 4: Product Innovation - The competitive edge in the running shoe market is increasingly driven by technological advancements in shoe design, particularly in midsole technology, which affects performance metrics like cushioning and energy return [9][12] - There is a growing demand for diverse running shoe options tailored to different consumer needs, such as casual runners and those with specific foot conditions [14][15]

Core Insights - The article emphasizes that valuations in stocks, real estate, or any cash-generating business are fundamentally based on future growth expectations, urging investors to rely on data rather than opinions [1] Group 1: Valuation Misconceptions - Many retail investors mistakenly label stocks as "expensive" solely based on high price-to-earnings (P/E) ratios without considering growth trajectories [2] - A proper valuation requires weighing price against growth potential, which is the focus of the analysis [2] Group 2: Company-Specific Analyses Roku Inc. - Roku's recent quarterly earnings showed a significant EPS of $0.07, contrasting with a consensus forecast of a 16-cent net loss, indicating the company's ability to drive growth despite cautious consumer spending [3][4] - Analysts have set a price target of $145 for Roku, reflecting its potential for higher earnings as its platform scales and ad revenues strengthen, suggesting a 40% upside from the current price of $99.81 [5][6] Spotify Technology - Spotify is viewed favorably by institutional investors due to its stable subscription revenue model, despite a forward P/E of 66.2x [9][10] - Analysts have initiated coverage with a price target of $845, indicating a 24% upside potential from the current price of $674.91 [11] On Holding - On Holding has successfully transitioned from a retail-focused model to one with significant wholesale exposure, expected to enhance gross margins and boost EPS [12][13] - The current price target for On Holding is $64.20, suggesting a 52.5% upside from its current price of $43.15, as analysts anticipate further growth from its wholesale model [14]

Core Viewpoint - Analyst recommendations play a significant role in influencing stock prices, but their reliability is questionable due to potential biases from brokerage firms [1][5][10]. Summary by Sections Analyst Recommendations - On Holding (ONON) has an average brokerage recommendation (ABR) of 1.48, indicating a consensus between Strong Buy and Buy, based on 24 brokerage firms [2]. - Out of the 24 recommendations, 17 are Strong Buy and 3 are Buy, which represent 70.8% and 12.5% of the total recommendations respectively [2]. Limitations of Brokerage Recommendations - Relying solely on ABR for investment decisions may not be wise, as studies indicate limited success in guiding investors towards stocks with the highest price increase potential [5]. - Brokerage analysts often exhibit a strong positive bias due to vested interests, leading to a disproportionate number of favorable ratings compared to negative ones [6][10]. Zacks Rank as an Alternative - Zacks Rank, a proprietary stock rating tool, categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, which are more reliable indicators of near-term stock performance [8][11]. - The Zacks Rank is distinct from ABR; while both are on a scale of 1 to 5, Zacks Rank is a quantitative model reflecting earnings estimates, whereas ABR is based on brokerage recommendations [9][12]. Current Earnings Estimates for On Holding - The Zacks Consensus Estimate for On Holding remains unchanged at $0.76 for the current year, suggesting stable analyst views on the company's earnings prospects [14]. - The unchanged consensus estimate has resulted in a Zacks Rank of 3 (Hold) for On Holding, indicating a cautious approach despite the Buy-equivalent ABR [15].

Core Insights - On Holding (ONON) closed at $42.57, with a daily increase of +1.12%, outperforming the S&P 500's gain of 0.37% [1] - The company experienced a monthly decline of 7.51%, underperforming the Retail-Wholesale sector and the S&P 500 [1] Earnings Projections - The upcoming earnings report is expected to show an EPS of $0.34, a 100% increase year-over-year [2] - Revenue is projected at $939.41 million, reflecting a 27.87% increase compared to the same quarter last year [2] Annual Estimates - For the annual period, earnings are anticipated to be $0.74 per share, a decrease of -32.73% from last year, while revenue is expected to reach $3.67 billion, an increase of +39.45% [3] - Analysts' forecast revisions are crucial as they indicate confidence in the company's performance and profit potential [3] Valuation Metrics - On Holding has a Forward P/E ratio of 56.89, significantly higher than the industry average of 18.15 [6] - The company has a PEG ratio of 2.8, compared to the industry average PEG ratio of 2.44 [7] Industry Context - The Retail - Apparel and Shoes industry is ranked 86 in the Zacks Industry Rank, placing it in the top 35% of over 250 industries [8] - Strong industry rankings correlate with better performance, with top-rated industries outperforming lower-rated ones by a factor of 2 to 1 [8]

Management Changes - Lenzing has extended the management board mandate of Christian Skilich until May 31, 2029 [1] - CFO Nico Reiner will not extend his mandate, which expires on December 31, 2025, with Mathias Breuer set to become the new CFO on January 1, 2026 [2] - Karl Mayer has appointed Lutz Wolf as its sole CEO, responsible for the entire group of companies [3] - Unspun has appointed Chris Blakeslee as its first independent board member, bringing extensive apparel industry experience [4][5] - On Holding's COO Sam Wenger will step down at the end of the year, with Scott Maguire taking on an expanded role [6] - Wax London has appointed Patrick Duggan as its new brand director, who previously worked with the company as a consultant [7]

Core Insights - On Holding AG (NYSE:ONON) is identified as one of the most oversold large-cap stocks in 2025, with a Buy rating maintained by UBS analyst Jay Sole and a price target set at $79.00 [1] - The stock has received multiple Buy ratings from analysts, including Morgan Stanley with a price target of $65.00 and Bernstein with a target of $70.00, indicating strong analyst consensus [2] - The median price target for On Holding AG is $40.96, suggesting a potential upside of 68.28% from current levels [2] Company Overview - On Holding AG specializes in the development and distribution of sports products, which include apparel, footwear, and accessories [3] - The company markets its products globally through various channels, including global distributors, independent retailers, an online presence, and its own stores [3]

Core Viewpoint - Analysts express optimism about certain stocks, suggesting potential for significant gains despite current high valuations in the market [1][2]. Group 1: Nebius Group - Nebius Group is a Netherlands-based AI hyperscaler operating large-scale GPU clusters for AI applications and developing autonomous vehicle technology [3]. - The stock has seen a remarkable increase, with its price more than quadrupling year to date, and analysts project a 34% upside potential over the next 12 months [4]. - In Q2 2025, Nebius Group's revenue more than doubled compared to the previous quarter, indicating strong demand for AI infrastructure [5]. Group 2: On Holding - On Holding is a rapidly growing athletic sportswear company with a presence in over 80 countries and has sold over 50 million products [6]. - Despite a year-to-date decline of over 20%, analysts predict a rebound, with an average 12-month price target suggesting a 55% increase from the current share price [7]. - The company reported a 32% year-over-year increase in net sales for Q2, reaching record highs, and expects at least 31% growth for the full year [7]. Group 3: The Trade Desk - The Trade Desk operates a leading technology platform for digital advertising, enabling targeted campaigns online and on streaming services [9]. - The stock has experienced a significant decline of almost 60% in 2025, but analysts foresee a recovery with a consensus price target indicating a 43% upside potential [10]. - In Q2, the company's revenue grew by 19% year over year, although this is a slowdown compared to the previous year's growth [11]. The company's strong customer retention rate of 95% and the growth potential in ad-supported connected TV contribute to the optimistic outlook [12].

Core Insights - Growth stocks are currently leading the market, with the S&P 500 up 14% and the Nasdaq-100 up 17% this year [2] - Three notable growth stocks to consider are Shopify, On, and Upstart [2] Group 1: Shopify - Shopify is a significant player in e-commerce, providing services rather than selling products directly to consumers [3] - The company holds over 12% market share in U.S. e-commerce, positioning itself as a competitor to Amazon [4] - E-commerce growth offers organic opportunities for Shopify, with international sales tripling since 2020 [5][6] - In Q2, Shopify's revenue grew 31% year-over-year, and operating income increased by 21% with a 9% margin [7] - Shopify's stock has risen 77% over the past year, indicating strong market confidence [7] Group 2: On - On is a rising brand in athletic wear with significant growth potential due to low brand penetration globally [8] - In Q2, total sales increased by 38% year-over-year, with apparel sales up 76% and accessories up 143% [9][10] - The company has doubled its brand penetration in the U.S. over the past year and maintains the highest gross margin in the industry at 61.5% [10] - On is expanding its product line and has engaged in successful collaborations, indicating a bright future [11] Group 3: Upstart - Upstart operates an AI-driven lending platform that assesses credit risk using extensive data, aiming to approve more loans without increasing risk [12] - The company reported over 100% revenue growth in Q2 and achieved its first net profit since 2022, with a GAAP net income of $5.6 million [13] - Upstart's stock is currently trading at a price-to-sales ratio of 6 and a forward P/E ratio of 23, suggesting an attractive valuation [13] - The company is better positioned now to navigate economic challenges and is launching more products for growth opportunities [14]

Group 1 - On Holding's COO, Sam Wenger, will step down at the end of the year after eight years in the role [1] - Scott Maguire, currently the chief innovation officer, will take on the expanded role of chief innovation and operations officer starting January 1, 2026 [1] - Wenger will remain with the company until the end of the first quarter of 2026 [1] Group 2 - Maguire joined On in 2025 and previously served as CEO of Specialized Bicycle Components and Group COO at Dyson [2] - On Holding has been gaining market share in the U.S. from competitors like Adidas and Nike by targeting younger customers through collaborations and product innovations [2] - The company raised its annual sales forecast in August [2]