On Holdings Has Investors On Cloud 9 After Impressive 90% Rally and Record Sales (Your Move, Nike)

Boy, I bet the “Nike and Adidas are the kings of athletic footwear” crowd feels dumb right about now…

While the big boys of the sneaker world are getting hit with inventory gluts and sluggish consumer spending, On Holding (NYSE: ONON) is out here lacing up (or, rather, not lacing up—more on that later) and running circles around the competition. The Swiss athletic apparel company has seen its stock rise nearly 90% year-to-date, leaving competitors in the dust, and having one helluva explosive moment in the process.

(Source: MarketBeat) 

In short, this meteoric rise has nothing to do with slapping a swoosh or three stripes on some overpriced sneakers. No it’s actually more of an impact on your foot than having an impact on your ego. Which is what footwear is supposed to do right? Right. You see, On’s secret sauce is its CloudTec technology—a cushioning system designed to make you feel like you’re running on clouds. No exaggeration (ask my 63 year old Dad who wears these babies on Saturdays).  

(Source: Giphy) 

Picture this: little cylindrical clouds on the outsole of the shoe that compress on impact and then rebound, launching you forward like a human slingshot. It’s the kind of tech that has runners hooked, and guess what? They’re willing to pay full price for it. That’s right, no clearance rack here, boys. 

(Source: Google Shop) 

With that said though, On isn’t stopping at just cloud soles. Oh no. They’re out here revolutionizing the very way shoes are made. During the 2024 Paris Olympics, On debuted their LightSpray technology, a process that lets a robotic arm spray a liquid polymer onto a shoe mold, creating a fully customized shoe in just three minutes. No seams, no laces, no tongue, no heel cap—just pure, unadulterated running bliss. Hellen Obiri even rocked these bad boys to win her second Boston Marathon. Talk about a massive flex.

(Source: Robbs Report) 

And unlike the Nikes and Adidas of the world, which are dealing with overstuffed warehouses and deep discounts, On Holding has the opposite problem: they literally can’t keep their shoes in stock. It’s the kind of problem you want to have. Less inventory means higher demand, which means their shoes are flying off the shelves at up to $190 a pop. Premium pricing = premium money printing, baby. 

(Source: Giphy) 

For instance, in Q2 2024, On Holding reported a 27.8% year-over-year revenue jump, bringing in a cool $635.2 million, beating analyst expectations. And while they missed EPS estimates by a penny (who’s counting?), their gross profit margin rose by 40 basis points to a whopping 59.95%. 

(Source: IBD) 

Sales were also up across all channels, with Direct-to-Consumer (DTC) sales rising 28.1% YoY and wholesale revenue not far behind at 27.6% YoY. They’re also crushing it in the Americas with a 26.7% YoY increase, as Asia Pacific is getting in on the action with a tidy 24.8% YoY growth. Love to see it. 

(Source: Investopedia) 

In addition, On Holding isn’t just resting on its laurels (or clouds). CEO David Allemann mentioned that the company is focused on scaling its U.S. warehouse operations to keep up with the insane demand. They’re also reiterating their full-year guidance of 30% net sales growth and 60% gross profit margins. In other words, they’re just getting started and Wall Street is frothing at the mouth. 

(Source: Giphy) 

With a current stock price of $50 (after the stock has ripped nearly 90% YTD), 18 different analysts figure the stock still has some gas left in the tank as they’ve slapped a $60 price target (and 20% upside) on the footwear company. So clearly, it’s safe to say the bulls are out in full force here.

So yeah, in the end, while the rest of the sneaker world is tripping over their own laces, On Holding is lacing up (or spraying on?) for the next leg of its seismic run. Could we see another 90% explosion over the course of the next year? Only time will tell, but it’s obvious that On Holding is ripping faces off while its investors are sitting pretty on Cloud 9. 

(Source: Giphy) 

Your move, Nike, Adidas, Hoka, and whomever else sells an overpriced junk of a sneaker. 

In the meantime, keep an eye on On Holding and as always stay safe and stay frosty, friends! Until next time… 

P.S. Whadda beauty! Our alert last week definitely proved itself worthy as $MNPR ripped to a peak of +71% in less than four days! But, but but… that was last week. This week though? Oh baby, our screeners are flashing green on one little known stock... and by the looks of it, we might have another $LFLY on our hands (ICYMI, $LFLY rocketed 142% in less than 25 minutes). Meaning, if you haven't done so yet, I highly suggest upgrading to premium before things get crazy once we drop our newest trade alert! Don't say I didn't warn ya…

Stocks.News holds no positions in companies mentioned in the article.