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Earnings Growth Outlook Might Change The Case For Investing In On Holding (ONON)

Simply Wall St · 3d ago
  • On Holding recently attracted attention as consensus earnings estimates for the current fiscal year pointed to a 78.4% year over year increase, supported by strong revenue growth and only a slight miss versus earlier expectations in the last quarter.
  • The mix of strong forecast profit expansion and solid top line progress suggests that On Holding's core business engines in footwear and apparel are still gaining traction despite near term estimate noise.
  • We will now examine how On Holding's strong earnings growth expectations intersect with its existing investment narrative around premium margins and DTC expansion.

See how On Holding's momentum compares with other consumer and retail names by exploring our curated list of 20 high quality undiscovered gems that the market may not be fully pricing yet.

On Holding Investment Narrative Recap

To own On Holding, you need to believe this brand can keep scaling premium footwear and apparel while holding the line on pricing, discounting and product relevance. The recent move in earnings expectations and the strong one month share price run sharpen near term focus on whether direct to consumer growth and international rollout keep pace with higher cost and marketing commitments.

The key short term catalyst is execution in DTC and own retail, which already represents a large slice of sales, alongside new product franchises such as golf and future football lines. The biggest risk remains that heavy investment in stores, marketing and technology like LightSpray does not translate into enough productivity, which would leave margins exposed.

Recent commentary around DTC reaching 45.7% of Q2 2026 net sales ties directly into that thesis. A higher direct mix gives On Holding more control over pricing and merchandising, but it also raises the bar on store economics, logistics efficiency and inventory management, because more of the demand risk sits on the company rather than wholesale partners.

The push into regions such as EMEA and Asia Pacific, where Asia Pacific is already about 20% of group sales, shows how broad the expansion effort has become. For you as an investor, the link back to catalysts is clear: execution on e commerce, new sports segments and LightSpray driven manufacturing efficiency now needs to offset the very real risk that premium pricing and frequent price increases eventually face pushback from consumers or competitors.

How On Holding's Forecasts Tie Back To The Story

Forecasts around On Holding are essentially a bet that premium footwear and apparel can keep scaling while earnings catch up to the investment bill. Analysts are building their models on the idea that revenue can compound at 18.5% a year for the next few years, that profit margins edge slightly higher from 12.3% to 12.4%, and that the brand can keep broadening its reach without leaning too hard on discounting.

Current earnings are put at CHF 396.2 million. Consensus points to earnings of CHF 661.8 million by 2029, with the most optimistic forecasts at CHF 773.1 million and the most cautious at CHF 519.0 million. That implies an earnings increase of about CHF 265.6 million from today, which is a sizeable jump that needs to be underpinned by both DTC productivity and disciplined store rollout, not just higher pairs sold.

On Holding's narrative projects CHF 5.4b revenue and CHF 661.8 million earnings by 2029. This setup assumes 18.5% yearly revenue growth and an earnings increase of about CHF 265.6 million from current earnings of CHF 396.2 million.

To make those numbers line up with current Wall Street price targets, forecasts also assume the stock trades on a P/E of 24.0x those 2029 earnings, compared with 24.6x today and a lower multiple of 17.4x for the wider US Luxury peer group. That higher implied multiple relative to the sector asks you to believe that On Holding deserves a premium for its brand strength, margin profile and net cash, even as share count is expected to expand by about 1.29% a year.

The CHF 5.4b revenue ambition rests on the same building blocks discussed earlier. DTC reaching into the mid 40s as a share of sales, continued traction in regions like EMEA and Asia Pacific, and progress in newer categories such as golf and planned football lines all need to contribute. If those pieces do not track in step with the modelled growth rate, the path to the earnings and valuation framework above becomes harder to justify.

Uncover why On Holding's fair value indicates a 22% potential upside to its current price that could narrow quickly.

NYSE:ONON 1-Year Stock Price Chart
NYSE:ONON 1-Year Stock Price Chart

Exploring Other Perspectives

One alternate view puts the risk of over relying on Asia Pacific front and center for On Holding. The most cautious analysts were only penciling in revenue of about CHF 5.0b and earnings of roughly CHF 519.2 million by 2029 before this latest earnings momentum. That is a far more pessimistic story than consensus. It shows how sharply expectations can differ and why you may want to compare several scenarios before deciding how this news could reshape your own outlook.

Explore 8 other On Holding fair value estimates, including one that suggests as much as 32% downside from the current price.

Form Your Own Verdict

Don't just follow the ticker. Dig into the data and build a conviction that's truly your own.

  • A great starting point for your On Holding research is our analysis highlighting 3 key rewards that could impact your investment decision.
  • See our latest analysis for On Holding. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate On Holding's overall financial health at a glance.

Looking For More Investment Ideas Beyond On Holding?

If On Holding has sharpened your thinking about brands, margins and growth expectations, it can be useful to set it alongside other companies with very different profiles. A focused screener helps you compare trade offs clearly, whether you care more about value, balance sheet strength or resilience through the cycle.