On Holding AG (ONON): A Bull Case Theory

Ricardo Pillai

Mon, Jun 9, 2025, 6:29 AM 3 min read

We came across a bullish thesis on On Holding AG (ONON) on Quality Stocks’ Substack. In this article, we will summarize the bulls’ thesis on ONON. On Holding AG (ONON)'s share was trading at $58.53 as of 3^rd June. ONON’s trailing and forward P/E were 76.41 and 55.25 respectively according to Yahoo Finance.

A professional football team running onto the field, in an iconic stadium of the company.

On Holding has consolidated its leadership under a single-CEO structure, with Co-CEO and CFO Martin Hoffmann assuming the role of sole Chief Executive Officer as of April 1st. This transition comes amid a period of exceptional growth for the company, which continues to outperform its broader footwear market.

Posting a 43% year-over-year revenue increase to $727 million—far exceeding analyst expectations of $680 million—On demonstrated strong execution across both Direct-to-Consumer and wholesale channels, which grew 45% and 41%, respectively. This favorable channel mix, with a tilt toward higher-margin DTC sales, contributed to gross margins expanding to 60%, reinforcing On’s premium brand positioning.

The company subsequently raised full-year guidance, now targeting 28% revenue growth, reflecting continued confidence in its trajectory. Amidst a shifting industry landscape where legacy giants like Nike are losing share, On stands out as a disruptive force with compelling brand momentum. However, this rapid expansion has led to a premium valuation, with shares trading at over 60 times earnings, leaving little room for error and limited downside protection. Despite having nearly doubled since its April low, the stock's elevated multiple suggests that patient investors might consider awaiting a pullback.

Going forward, the critical variable to watch is market share: sustained share gains are central to On’s thesis, and any signs of stagnation or reversal could materially alter the investment case. For now, On remains a high-growth, high-conviction story, albeit one priced for perfection, and dependent on continued flawless execution to justify its valuation.

We previously covered a bullish thesis on ONON written by Sanjiv on Substck. The thesis highlighted its strong DTC-led growth, premium positioning, and rapid global expansion—validated by a 16.1% stock price increase since then and a 28.5% YoY revenue surge and its first year of positive free cash flow. The latest update by Quality Stocks reinforces this momentum, with 43% revenue growth and margin expansion, but cautions that ONON's high valuation (60x earnings) leaves little room for missteps. While the growth story remains intact, new investors may want to await a better entry point.