Intrinsic Value On Holding AG (ONON)

• Previous Close: $45.25
• Intrinsic Value: $305.31
• Upside potential: +575%

Stock Valuation Context

Business Model And Market Position

On Holding AG operates in the athletic footwear and apparel industry, leveraging a premium performance-driven brand positioning. The company generates revenue primarily through direct-to-consumer (DTC) sales and wholesale partnerships, with a focus on innovative running shoes featuring proprietary CloudTec cushioning technology. On differentiates itself through Swiss engineering, sustainability initiatives, and collaborations with elite athletes, targeting performance-oriented and lifestyle consumers in North America, Europe, and Asia. The brand competes in the high-growth performance running segment against established players like Nike and Adidas while carving out a niche with its unique technology and aspirational branding. On’s vertically integrated design and distribution model allows for strong gross margins, while its selective wholesale strategy preserves brand exclusivity. The company has expanded into apparel and accessories, diversifying revenue streams while maintaining its core identity as a performance-first athletic brand.

Revenue Profitability And Efficiency

On Holding reported CHF 2.32 billion in revenue for FY 2024, demonstrating strong top-line growth. Net income stood at CHF 242 million, with diluted EPS of CHF 0.71, reflecting improving profitability. Operating cash flow was robust at CHF 511 million, supported by efficient working capital management. Capital expenditures of CHF 60.5 million indicate disciplined reinvestment in growth initiatives, maintaining a healthy balance between expansion and cash generation.

Earnings Power And Capital Efficiency

The company’s earnings power is underscored by its ability to scale profitably, with net income margins expanding as revenue grows. Strong operating cash flow relative to net income suggests high-quality earnings. Capital efficiency is evident in the company’s ability to fund growth internally while maintaining a clean balance sheet, with operating cash flow covering capital expenditures multiple times over.

Balance Sheet And Financial Health

On Holding maintains a solid financial position with CHF 924 million in cash and equivalents against CHF 348 million in total debt, providing ample liquidity. The conservative leverage profile and strong cash position support flexibility for strategic investments. The balance sheet reflects a growth-oriented yet prudent approach, with resources to fund expansion while mitigating financial risk.

Growth Trends And Dividend Policy

The company exhibits strong revenue growth trends, benefiting from category expansion and geographic penetration. On Holding does not currently pay dividends, reinvesting cash flows into brand development, product innovation, and market expansion. This aligns with its growth-stage profile and focus on capturing market share in the competitive athletic footwear sector.

Valuation And Market Expectations

The market appears to price On Holding at a premium relative to traditional footwear peers, reflecting expectations for sustained above-industry growth rates and margin expansion. Valuation multiples suggest investors anticipate successful execution of the company’s premium positioning and international expansion strategy, particularly in North American and Asian markets.

Strategic Advantages And Outlook

On Holding’s strategic advantages include its differentiated product technology, premium brand positioning, and direct-to-consumer capabilities. The outlook remains positive given secular trends favoring performance footwear and the company’s ability to innovate. Key challenges include maintaining growth momentum amid increasing competition and successfully scaling operations while preserving brand exclusivity and product quality.

Sources

Company filings, investor presentations