A Global Sportswear Ambition With a Pricing Constraint
On Holding AG (NYSE:ONON) wants to grow from a specialist running-shoe brand into a broader sportswear competitor while protecting premium prices. At its September 22, 2026, investor day, management targeted at least CHF 5.6 billion in 2029 annual sales, approaching $7 billion at the exchange rate cited in its presentation, along with gross margin of at least 65% and adjusted EBITDA margin above 22%.
The tension is that its largest market is slowing. On has resisted discounting to stimulate near-term orders, a strategy that supports margins but makes growth more dependent on product demand. Its expansion into soccer, including the September signing of Kylian Mbappé, broadens the addressable market without yet supplying a measurable sales forecast.
An athletic footwear company competing in a market dominated by global giants might seem an unlikely contender against technology and financial software businesses. Yet On Holding AG ranks fourth among our 10 best growth stocks under $50 to buy now. The real surprise is the identity of the three companies ahead of it, including one whose growth strategy has little in common with selling consumer products.
Premium Pricing Holds Up as Americas Growth Slows
In Q2 2026, On Holding AG generated CHF 850.3 million in revenue, up 13.5% as reported and 21.6% in constant currency. Gross margin reached 65.4%, compared with 61.5% a year earlier, supported by a direct-to-consumer business that grew 34.3% in constant currency and represented 45.7% of sales.
Yet Americas growth eased to roughly 13% from 17% in the first quarter, even as Asia-Pacific advanced about 55%. Rather than treating the gross-margin improvement as proof of uniform demand, the figures show that On is capturing more value per sale while its largest region is growing more slowly. The competitive question is explored in whether Nike is losing its competitive edge to On, which compares On’s advance with Nike’s attempts to restore momentum.
Brand Expansion Requires Commercial Returns
On Holding AG plans its first soccer boots in 2027. Mbappé’s agreement includes cash and equity, but the terms are undisclosed, preventing a credible calculation of its incremental return. Even a globally recognized athlete does not guarantee distribution, repeat purchases, or profitable market share in a category where Nike, Adidas, and Puma have established products.
The same uncertainty informs debate about the company’s 2029 targets. Investors can examine what investors may be missing in On’s CHF 5.6 billion sales target and buyback; the story also discusses a buyback authorization of up to $1 billion through 2029, which supports capital returns but does not replace operating growth. Barclays (Overweight, $44 from $42) and Needham (Buy, $40 from $37) welcomed the multiyear framework, while BMO (Market Perform, $33 from $28) remained cautious about the US wholesale transition.
The Price Assumes More Than One Good Quarter
Seeking Alpha estimates dated October 13 imply a P/E of 20.62 for 2026, falling to 17.27 for 2027, 13.80 for 2028, and 11.50 for 2029 at an unchanged share price. That compression assumes EPS growth of 67.40% in 2026 and 19.38%, 25.16%, and 20.04% in the following three years. Sustaining a 65%-plus gross margin while entering new sports is therefore central to those forecasts, not a secondary marketing issue.
Insider Monkey hedge fund holders rose to 54 in Q2 from 52 in Q1, while short interest reached 27.89 million shares by September 30.
On Holding AG also authorized a share buyback of up to $1 billion through 2029. Repurchases could support EPS by lowering the share count, but the program does not establish higher operating earnings and competes with marketing, product development and retail investment for capital. The key operational test for On Holding AG is whether growth in the Americas can recover without compromising the brand’s premium pricing strategy. With CHF 1.21 billion in cash and CHF 562.5 million in lease liabilities as of June 30, the company has financial flexibility to support its expansion.
The next evidence investors need is renewed momentum in the Americas without discounting away the premium economics supporting On’s earnings growth.
READ NEXT: On Holding (ONON) Approves a $1 Billion Buyback Alongside its 2029 Targets and Mbappé Leaves Nike (NKE) for On (ONON)
