On Holding (NYSE:ONON) has caught the attention of investors following a noticeable shift in its stock’s recent performance. After a solid month of gains, the company’s year-to-date returns remain in negative territory. This has sparked renewed interest in its next steps.
See our latest analysis for On Holding.
The 1-month share price return for On Holding sits just under 12%, driven by recent strong gains and signaling some positive momentum after a tough start to the year. However, the bigger story is a year-to-date share price decline of over 20%, and a 1-year total shareholder return down nearly 25%. Despite the volatility, the company’s three-year total shareholder return has still more than doubled, indicating that its longer-term growth potential remains on investors’ minds.
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This impressive long-term performance begs the question: Is On Holding’s current valuation a bargain for growth-focused investors, or has the market already anticipated all potential upside and priced it in accordingly?
At $43.99, On Holding’s last close comes in well below the most widely followed narrative fair value of $61.29. This hints at a disconnect between the current price and what analysts see as justified by future growth. This sets up an intriguing debate about just how bold the market’s revenue and profit assumptions for On Holding truly are.
The acceleration in DTC (Direct-to-Consumer) and e-commerce channels, with DTC reaching new highs (41.1% of sales in Q2 and up 54% YoY), gives On more control over brand, pricing, and customer data while increasing gross and EBITDA margins. This operational catalyst is likely to further expand profitability as DTC continues its mix shift.
Want the inside story on this bullish valuation? The key driver is On Holding’s extraordinary shift to higher-margin channels and aggressive growth targets. But exactly how ambitious are those projections, and what’s fueling such optimism? Peek behind the curtain and discover the bold expectations that shape this valuation.
Result: Fair Value of $61.29 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, risks remain, such as pressure on margins if premium pricing proves unsustainable and competitive challenges if On Holding expands into team sports.
Find out about the key risks to this On Holding narrative.
While discounted cash flow analysis paints On Holding as undervalued, looking at its earnings-based valuation tells a different story. The company trades at a price-to-earnings ratio of 52.6x, much higher than the US Luxury industry average of 20x, the peer average of 28.3x, and even the fair ratio of 26.8x. This sizeable premium suggests investors are paying up for expected growth. However, it also means there is more room for downside risk if those expectations do not materialize. Is the market getting ahead of itself, or is this premium justified?
See what the numbers say about this price — find out in our valuation breakdown.
NYSE:ONON PE Ratio as at Nov 2025
If you see the numbers differently or want to dig deeper on your own, it takes just a few minutes to create your own narrative and shape your outlook. Do it your way
A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding On Holding.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ONON.
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