We came across a bullish thesis on On Holding AG on Long-Term Pick’s Substack by Dan. In this article, we will summarize the bulls’ thesis on ONON. On Holding AG’s share was trading at $45.29 as of February 13th. ONON’s trailing and forward P/E were 52.14 and 31.25, respectively according to Yahoo Finance.
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On Holding AG (NYSE: ONON) is a Swiss premium sportswear company founded in 2010, built around its proprietary CloudTec® cushioning technology, which enhances running performance. The company has expanded globally, selling products in over 80 countries through a mix of direct-to-consumer and wholesale channels, with flagship stores in Zurich, New York, Tokyo, and Palo Alto. Footwear remains the core revenue driver, while premium apparel and accessories, now contributing around 7% of sales, are growing rapidly, with apparel up 86.9% year-over-year in Q3 2025.
On reported CHF 794.4 million in net sales in Q3 2025, up 24.9% YoY, driven by broad-based demand across regions and channels, with Asia-Pacific expanding over 90% and providing significant long-term growth optionality. The company maintains a narrow economic moat through proprietary technology, premium brand positioning, high gross margins of 65.7%, and deepening direct-to-consumer engagement, which enhances customer loyalty and switching costs.
Management, led by CEO/CFO Martin Hoffmann, emphasizes disciplined capital allocation, investing in innovation, brand marketing, and DTC infrastructure while keeping debt limited and holding CHF 961.8 million in cash. On’s global expansion, strong profitability, operational efficiency, and brand credibility, reinforced by elite athlete partnerships, position it well against larger competitors such as Nike, Adidas, HOKA, and Lululemon.
The stock trades near its fair value with a PEG ratio of 1.18, supported by projected EPS growth of 25–26% over the next five years. With expanding geographic penetration, category diversification, and strong margins, On presents a compelling long-term investment opportunity, offering both growth potential and limited downside risk for investors seeking a premium, high-performance sportswear business.
Previously, we covered a bullish thesis on On Holding AG (ONON) by Sanjiv in October 2024, which highlighted the company’s rapid global expansion, innovative CloudTec® technology, growing direct-to-consumer channel, and strong revenue growth with premium pricing. ONON’s stock price has depreciated by approximately 10.13% since our coverage. Dan shares a similar view but emphasizes improving profitability, disciplined capital allocation, high gross margins, and Asia-Pacific expansion, providing a more detailed perspective on long-term operational efficiency.
On Holding AG is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held ONON at the end of the third quarter which was 42 in the previous quarter. While we acknowledge the risk and potential of ONON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ONON and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
