On Holding AG

Based on a comprehensive analysis of On Holding (ONON), the stock presents a compelling but high-risk growth opportunity.

Summary Analysis ONON demonstrates exceptional fundamental momentum with strong revenue growth and a remarkable turnaround to profitability, supported by a robust balance sheet with minimal debt. However, this strength is counterbalanced by a premium valuation and extreme stock volatility (Beta > 2.0), evidenced by a 42% drawdown, which indicates high risk. The investment case hinges on the company's ability to consistently deliver on its growth promises to justify its current price.

Buy Recommendation ONON is a SPECULATIVE BUY for investors with a high risk tolerance and a long-term horizon. The company's powerful fundamental turnaround and clean financial health provide a solid foundation for growth. While the valuation is rich and the stock's volatility will lead to significant price swings, the improved forward earnings outlook offers a more reasonable entry point. Investors should be prepared for a bumpy ride but may be rewarded if ONON continues its strong execution.

RockFlow Model Forecast: Three Scenarios for 2026

Based on a comprehensive analysis, here is the 12-month outlook for On Holding (ONON).

12-Month Outlook for ONON

The outlook is highly dependent on the company's ability to sustain its exceptional execution. Key catalysts for upside include continued market share gains in the performance running segment, successful geographic expansion (particularly in the Americas and Asia-Pacific), and the successful launch of new product categories like tennis and training footwear. The primary risk remains the stock's extreme volatility (Beta > 2.0), which could lead to sharp sell-offs on any earnings miss or signs of growth deceleration, amplified by its premium valuation. In the absence of a clear consensus analyst target, a realistic 12-month price range is $38 - $65, reflecting the binary outcome between exceptional growth execution and a de-rating on stiffer competition or macroeconomic pressures.

Wall Street Consensus

Most Wall Street analysts are optimistic about On Holding AG's 12-month outlook, with consensus target around $48.02, indicating expected upside potential.

Overall, ONON has investment potential but also faces challenges. Here are key factors to weigh before investing.

ONON has demonstrated impressive upside momentum but remains vulnerable due to its high volatility and significant drawdowns from recent highs.

The stock has posted exceptionally strong gains over three months, significantly outperforming the market, although short-term momentum has moderated considerably with only modest gains in the past month. ONON's beta of 2.15 indicates its price movements are more than twice as volatile as the broader market, contributing to both its recent outperformance and its risk profile.

Currently trading at $46.66, the equity sits approximately 52% above its 52-week low but about 24% below its high, suggesting it is in a mid-range position rather than overbought or oversold. However, the sharp 42% maximum drawdown highlights the substantial downside risk that accompanies its high-beta characteristics.

Revenue & Profitability ONON's Q3 2025 performance shows robust revenue growth to CHF 794.4 million, up from CHF 749.2 million in Q2. Profitability improved significantly with net income turning positive at CHF 118.9 million (14.97% margin) compared to a net loss in the prior quarter, driven by a stronger gross profit ratio of 65.74%. Operating income margin expanded to 15.70%, indicating improved cost management despite stable SG&A expenses.

Financial Health The company maintains excellent liquidity with a current ratio of 2.55 and cash ratio of 1.28, supported by substantial cash reserves. A conservative debt-equity ratio of 0.33 reflects minimal leverage, while interest coverage of 15.4x demonstrates strong ability to service existing obligations. The debt ratio of 18.3% indicates a predominantly equity-financed capital structure.

Operational Efficiency ONON's return on equity of 7.71% shows moderate efficiency, though asset turnover remains modest at 0.29. The 125.9 days inventory outstanding suggests potential room for inventory management optimization. However, the operating cash flow to sales ratio of 19.8% indicates solid cash generation from core operations, supporting overall financial stability.

Valuation Level: ONON appears richly valued based on its trailing PE ratio of 53.63, which indicates a substantial growth premium despite its negative PEG ratio suggesting earnings growth is expected to be negative or volatile. However, the forward PE of 23.64 signals significantly lower earnings expectations priced in for the coming year, presenting a potentially more reasonable outlook if the company can meet its earnings projections.

Peer Comparison: Unfortunately, without specific industry average data for valuation multiples, a definitive peer comparison cannot be conducted. This lack of industry context makes it impossible to objectively determine whether ONON's elevated multiples like its EV/EBITDA of 67.88 represent a sector premium or a company-specific valuation concern. Investors should seek relevant industry benchmarks to properly assess relative valuation.

Of course. Here is a professional risk analysis for ONON based on the provided metrics.

1. Volatility and Market Risk ONON exhibits exceptionally high volatility risk, as evidenced by its Beta of 2.153. This indicates the stock is more than twice as volatile as the broader market; it can be expected to rise significantly more during market upswings but also fall much more sharply during downturns. This elevated volatility is confirmed by the substantial one-year maximum drawdown of -42.39%, meaning the stock experienced a peak-to-trough decline of over 40% within the past year. Investors must be prepared for considerable price swings and potential for significant short-term losses.

2. Other Principal Risks The absence of reported short interest is a positive signal, suggesting a lack of concentrated institutional betting against the stock's price in the near term. However, this does not eliminate other risks. The primary concerns for a growth-oriented company like ONON likely center on execution risk, intense competition in the athletic footwear market, and its ability to maintain its premium growth trajectory. Furthermore, while not a current issue per the data, liquidity risk should be monitored, as lower trading volumes can exacerbate volatility during market stress.