ONON Stock Forecast & Price Target

On Holding is a well-established brand with global recognition, strong management, and a track record of exceeding expectations. The company's focus on innovation and commitment to margin expansion through DTC sales make it a promising investment opportunity. The recent dip in sales and leadership changes are seen as proactive measures to protect the company's long-term growth. Strong performance across all regions and categories, particularly in apparel and partnerships, reinforces the brand's solid positioning within the market. Investors may see upside potential from multiple expansion and improving estimates, as well as potential catalysts such as new sports or sponsorships.

On Holding is poised for strong, deliberate growth, with a focus on margins, and the company is expected to issue new financial targets through '29, projecting high teens to 20% CC growth and low 20% or better Adj. EBITDA margins, with potential for even higher revenues and margins due to favorable channel mix and operational efficiencies. However, gross margins may be impacted in the short-term due to a promotional environment and reduced brand heat, as well as potential risks such as increased competition and higher tariffs. As a result, our Buy rating is supported by a $40 PT, reflecting a 13x multiple on our NTM EBITDA forecast, due to moderating topline growth and declining sentiment around growth stories in the current macro environment.