One-glance verdict
Within fair range
$26.09 our estimate vs market $29.96
Wall Street consensus: $43.24 (65.7% higher than our fair-value estimate)
15% above our estimate
Fundamentals snapshot
On Holding AG
ONON · NYQ · Consumer Cyclical · Footwear & Accessories
Current price
$29.96
52-week range
$26.36 - $51.08
Market cap
$10.01B
Balance sheet
Healthy
17.21x Strong cushion
Net cash $817.22M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 30.0% last year.
- Reward Returns 24.0% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 3/10 years.
What this company does
On Holding AG
On Holding designs and sells popular running shoes, clothing, and accessories under the "On" brand. The company makes money by selling to other retail stores and also directly to customers through its own website and stores. This direct sales approach is important because it often leads to higher profit margins (the percentage of the sale price that is actual profit) and helps build a strong relationship with its customers.
How the company got here
On was started in the Swiss Alps in 2010 by three friends, including a former professional athlete named Olivier Bernhard. Bernhard wanted to create a running shoe that felt completely new, so he started experimenting by gluing pieces of a garden hose to the bottom of shoe prototypes. This quirky idea led to the company's unique cushioning technology called CloudTec, designed to make running feel like you're on clouds. The company quickly gained attention, and just a month after being founded, a prototype won a major award for innovation in sports. A key turning point was when Swiss tennis star Roger Federer invested in the company in 2019, bringing global recognition to the brand.
What it actually does
On Holding AG is a sportswear company that makes high-end athletic shoes, clothing, and accessories. Their products are designed for running, outdoor activities like hiking, and everyday wear. The company is most famous for its running shoes, which feature a unique sole with hollow, cloud-like pods that provide a distinctive look and feel. They sell their gear through their own website and physical stores, as well as through other retailers like specialty running shops and high-end department stores.
Shoes
This is by far the largest part of On's business, making up the vast majority of its sales. The company designs and sells a wide range of footwear for running, tennis, hiking, and daily activities, all featuring its signature CloudTec sole technology. Customers, from elite athletes to casual walkers, pay for the combination of performance technology and a distinct, premium design. This segment has been the main driver of the company's rapid growth.
Apparel
This is a smaller but rapidly growing part of On's business. The company sells performance clothing designed for running and training, such as jackets, tops, and pants, as well as casual wear that blends athletic style with everyday comfort. Customers who buy On's shoes are the main target for this segment, which aims to provide a complete head-to-toe outfit. While it's a much smaller slice of revenue than shoes, it is growing very quickly.
Accessories
This is the smallest segment of the company's business. It includes items that complement their main footwear and apparel lines, such as performance socks, caps, and bags. These products are sold to the same athletes and active customers who purchase their shoes and clothing. This part of the business represents a very small fraction of the company's total sales.
What management is betting on now
The company is focused on continuing its rapid growth by expanding its direct-to-consumer (selling directly to customers online and in its own stores) business, which gives them more control over pricing and customer relationships. They are also heavily investing in product innovation beyond running shoes, pushing further into apparel and other sports categories like tennis and even exploring new areas like golf and soccer. A major priority is to continue growing in international markets, especially in Asia and other parts of Europe where they see a lot of potential. Management is also focused on maintaining its premium brand image by avoiding discounts and carefully managing how its products are sold in other stores.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $26.09 vs current price $29.96
Wall Street consensus is the average analyst price target: $43.24 (65.7% higher than our fair-value estimate).
Our most-likely fair value is $26.09 a share — about 12.9% away from today's price of $29.96, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $817.2M - more cash than debt. Interest coverage 17.2x.
Net debt
$-817.22M
Interest coverage
17.21x
On Holding AG's profit covers its interest bill about 17.2 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
ONON
BASELINE
On Holding AG
Total debt $679.10M Interest coverage 17.21x This is the baseline the peer rows are being compared against.
Total debt $472.33M Interest coverage 499.17x +2,800% vs ONON Carries about 29.0x more debt cushion than ONON.
Total debt $1.69B Interest coverage 10.05x -42% vs ONON Carries about 1.7x less debt cushion than ONON.
Total debt $3.03B Interest coverage 4.86x -72% vs ONON Carries about 3.5x less debt cushion than ONON.
Total debt $1.38B Interest coverage -1.17x -100% vs ONON This peer has almost no interest-payment cushion compared with ONON.
What you should know
The case for and against ONON
3 Rewards
0 Risks
Rewards
-
Revenue grew 30.0% last year.
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Returns 24.0% on equity, ahead of 40% of its peers.
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Free cash flow was positive in 3/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
20.81x
Forward P/E
14.57x
P/B
4.34x
P/S
3.11x
EV/EBITDA
19.04x
PEG ratio
0.50x
Profitability
How much profit each dollar creates
Gross margin
64.8%
Operating margin
14.0%
Net margin
12.3%
ROE
24.0%
ROA
9.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.29x
Current ratio
2.83x
Quick ratio
2.12x
Total debt
$679.10M
Total cash
$1.50B
Growth
How the business has been compounding
Revenue TTM
$3.89B
Revenue 5Y CAGR
35.1%
EPS TTM
1.44
EPS 5Y CAGR
50.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$434.02M
Free CF TTM
$339.13M
FCF margin
8.7%
Dividend
Shareholder payout
Yield
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Payout ratio
0.0%
Last ex-div date
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