Byte # 32: The One That Got Away… Until Now: Revisiting ONON
Ladies and Gentlemen,
Today, I want to talk about a stock I regret not investing in earlier-even though it was right in front of me the whole time!
About three weeks ago, I shared a post on LinkedIn titled:- “When your favorite shoes could’ve made you 20% overnight.” Yes, I’m referring to On Holdings AG ($ONON)-the brand behind the shoes nearly everyone, including myself, loves.
Even with the price now around ~$47, I believe there’s still meaningful opportunity here in the near to medium term.
On, a Switzerland-based company, has built a premium athletic brand centered around its Cloudtec footwear-famous for its distinctive, hole-shaped soles designed to make you feel like you’re walking on a cloud. The company has cultivated a loyal and rapidly growing customer base, yet it remains relatively small and is still expanding globally.
Despite the challenging environment many competitors face, On continues to post strong results. In Q3 2025, revenue grew 35% year over year (currency neutral), with strength across both direct-to-consumer and wholesale channels as the brand expands its global footprint.
On is also impressively profitable, delivering a 60.6% gross margin and a 290% increase in net income year over year in the third quarter.
Now, to be transparent-I typically avoid retail stocks altogether. I find the category risky and highly competitive, where leaders can quickly be overtaken. A good example is Lululemon (LULU), which hit its 52-week high in Oct ’23 and has been declining since due to inventory challenges and the intensifying athleisure competition it once pioneered.
That’s why my investment in ONON is modest and for now intended for short to medium term. My holding period could extend to 3–5 years depending on how the story evolves. Management remains confident in the company’s long-term growth potential, supported by premium positioning and a healthy innovation pipeline. Still, ONON does carry risks-fierce competition, elevated valuation multiples, and macroeconomic pressures that could temper its trajectory.
At the current price of ~$47, assuming 25% EPS growth over the next five years and applying a 35x P/E, my high-case estimate comes to $90. For the low end, I use 80% of today’s price. That gives an upside/downside ratio of 4.3 to 1, implying an estimated annual return of roughly 14%.
To conclude, I see compelling growth potential driven by strong execution and powerful momentum. However, this remains a cyclical name, and any slowdown in the U.S. market could weigh on it-so stay vigilant if you decide to invest.
That’s all for today. Wishing you a wonderful day and week ahead! See you next week.
Best,
Pooja
Your Friend in Investing 😊
