Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both Gap (GAP) and On Holding (ONON) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revi ...

Group 1 - The article emphasizes the importance of identifying "divergent stocks," which are disruptive companies with strong fundamentals and long growth potential but currently undervalued prices [1] - The investment strategy focuses on long-term growth and seeks innovative companies that contribute positively to society [1] Group 2 - The author has a beneficial long position in ONON shares, indicating a personal investment interest in the company [1]

Group 1 - On Holding AG (ONON) has experienced a decline of over 30% from its all-time high in late January [1] - Following the recent sell-off, shares of On Holding AG appear to be fairly priced [1] Group 2 - The analysis emphasizes the importance of quantitative methods in identifying undervalued stocks across various industries [2] - The author has been investing since 2013 and has gained knowledge from extensive reading on stock market strategies [2]

Group 1 - The U.S. stock markets have recently experienced a sharp correction, particularly affecting growth stocks, prompting a search for high-performing international companies [1] - The article mentions the decision to divest from struggling companies like Nike, indicating a shift in investment strategy [1] Group 2 - Gary Alexander, with extensive experience in technology and startups, contributes insights on industry trends and has been active on Seeking Alpha since 2017 [1] - His articles are widely disseminated, appearing in popular trading apps like Robinhood, which enhances their reach and influence [1]

Group 1: Market Overview - The S&P 500 is currently down in 2025, presenting a potential buying opportunity as economic uncertainty drives investor fear [1] - Despite market conditions, many companies are performing well and have significant growth opportunities [1] Group 2: MercadoLibre - MercadoLibre stock has increased by 41% over the past year and is the only stock on the list that is up in 2025 [3] - The company operates an e-commerce platform in Latin America, which is still underpenetrated at about 13% compared to 24% in the U.S., benefiting from a growing customer base [4] - Revenue for MercadoLibre increased by 96% year over year in Q4 2024, with gross merchandise volume (GMV) up 56% [4] - The company has developed a fintech infrastructure that supports digital payments, with total payment volume increasing by 49% year over year in Q4 [6] - MercadoLibre is the leading fintech company in three of its four largest markets by monthly active users [6] - The company is positioned for significant growth as it drives a digital revolution in its region [7] Group 3: Shopify - Shopify stock has risen by 25% over the past year, with strong growth and increasing profitability [8] - The company has expanded beyond e-commerce websites to become a full commerce platform, with most sales now coming from payment processing [9] - International sales grew by 33% year over year in 2024, accounting for 30% of total revenue [10] - Shopify has reported seven consecutive quarters of revenue growth of at least 25%, with a free-cash-flow margin reaching 22% in Q4 [11] - The company has substantial long-term opportunities and is rolling out more services in international markets [10][11] Group 4: On Holding - On Holding stock has increased by 45% over the past year, recognized for its unique sneaker soles and growing brand presence [12] - The company reported a 41% year-over-year revenue increase in Q4 2024, driven by a 48% rise in direct-to-consumer sales [14] - On's gross margin expanded from 60.4% to 62.1% year over year in Q4, with net income increasing by 435% [14] - The management has a four-pillar strategy focused on brand awareness, omnichannel strategy, product assortment expansion, and operational efficiency [15]

Investment Rating - The report assigns a strong buy rating for the company, indicating a positive outlook for future performance [5][6]. Core Insights - The company, On Running (ONON), experienced a robust sales growth of 35.7% year-on-year in Q4 2024, reaching 606.6 million Swiss Francs, driven by increased global brand recognition [5]. - Direct-to-Consumer (DTC) sales surged by 43.4% to 296.2 million Swiss Francs, while wholesale business grew by 29.1% to 310.4 million Swiss Francs, benefiting from selective expansion with key clients [5]. - The company anticipates a sales growth of at least 27% for 2025, projecting total sales of 2.94 billion Swiss Francs [8]. Financial Overview - In FY 2024, total sales reached 2.318 billion Swiss Francs, marking a 29.4% increase, with DTC sales growing by 40.3% and wholesale by 22.8% [6]. - The gross margin improved by 1.0 percentage point to 60.6%, and net profit increased by 204.5% to 242.3 million Swiss Francs, with a net profit margin of 10.4% [6]. - The company reported a diluted earnings per share of 0.97 Swiss Francs for FY 2024 [6]. Regional Performance - EMEA market sales grew by 18.2% to 577.8 million Swiss Francs, the Americas by 27.4% to 1.480 billion Swiss Francs, and the Asia-Pacific market surged by 84.5% to 260.2 million Swiss Francs [6]. - The Asia-Pacific region showed particularly strong growth, indicating a significant opportunity for expansion [6]. Product Performance - Footwear sales increased by 28.5% to 2.199 billion Swiss Francs, with specific models like Cloudmonster, Cloudsurfer, and Cloudrunner recording growth rates between 60% and 140% [6]. - Apparel sales rose by 46.7% to 101 million Swiss Francs, while accessories saw a 49.5% increase to 17.7 million Swiss Francs [6]. Future Outlook - For 2025, the company expects a gross margin around 60.5% and an EBITDA margin between 17.0% and 17.5% [8]. - The company plans to expand its production capacity in Zurich and build a larger facility in South Korea, aiming to enhance operational efficiency [7]. - The number of stores in China is projected to increase from 58 to 80, with a target market share of 10% by 2026 [7].

Core Insights - Consumer-driven industries are particularly susceptible to economic downturns, yet strong brands like On Holding can still succeed [1] - The U.S. consumption-based economy significantly impacts the stock market, influencing investor strategies during uncertain times [1] - On Holding is highlighted as a company with strong brand power and resilience, presenting an attractive investment opportunity even in volatile markets [1] Industry Analysis - The current economic climate poses challenges for consumer-driven sectors, necessitating a focus on brands that can maintain pricing power [1] - Investors are encouraged to identify stocks with robust brand strength to navigate market uncertainties effectively [1] Company Focus - On Holding is positioned as a resilient player in the market, showcasing the ability to thrive despite economic challenges [1] - The discussion emphasizes the importance of brand power in sustaining performance during downturns, with On Holding serving as a prime example [1]

Core Insights - The video discusses the economic challenges ahead and identifies resilient companies that are well positioned to thrive, specifically highlighting On Holding (ONON) as a key player for investment strategies in 2025 [1] Company Performance - On Holding (ONON) is noted for its strong performance metrics and pricing power, making it a potential candidate for investment [1]

Core Insights - On Holding reported an outstanding quarter in Q4 2024, exceeding investor expectations [1] - The company anticipates nearly 30% growth in 2025, indicating strong long-term potential [1] Financial Performance - Q4 2024 results were significantly positive, contributing to the company's growth narrative [1] - Management's guidance for 2025 suggests sustained momentum in revenue generation [1] Market Position - On Holding is positioned as a growth stock, appealing to investors looking for long-term opportunities [1] - The company's performance and future outlook suggest it is a strong contender in its industry [1]

Company Overview - On Holding (ONON) is a premium athleticwear brand known for its distinctive sole design, particularly the On Cloud shoe, targeting an affluent clientele while also resonating with a broader audience through athlete endorsements and partnerships [3][4]. Market Performance - On's stock has experienced a decline of 8% year to date despite a strong fourth-quarter earnings report, which saw revenue increase by 40% year over year, with direct-to-consumer sales rising by 49% [7][9]. Financial Results - The company reported a significant net income increase of 436% from a loss the previous year, with earnings per share (EPS) reaching $0.33, surpassing Wall Street's consensus of $0.18 [8]. Growth Opportunities - On is expanding its global footprint and brand awareness, with management guiding for a 27% sales increase in 2025, indicating strong growth potential as it continues to innovate and maintain operational excellence [10][12]. Product Performance - The company has seen impressive growth in various product categories, with shoe sales up 39%, apparel up 83%, and accessories up 86% year over year in the fourth quarter, suggesting strong customer affinity for the brand [11]. Competitive Position - On has the highest gross margin in the industry, increasing from 60.4% to 62.1% year over year, indicating strong pricing power and a resilient customer base that may be pulling market share from competitors [6][8].