ON (NYSE:ONON) Shares Gap Down - Time to Sell?

Key Points

• On Holding shares fell sharply, opening at $34.72 versus the prior close of $37.53 and trading around $34.60.
• Despite a third-quarter earnings beat, sales growth of 17.2%, and a 25% increase in direct-to-consumer sales, investors may be concerned that gross margin benefited from a one-time CHF 52.6 million tariff refund.
• The company maintained its full-year sales-growth outlook in the low-20% range at constant currency; analysts’ consensus rating is “Moderate Buy,” with a $43.81 average price target.

On Holding AG (NYSE:ONON - Get Free Report) shares gapped down before the market opened on Tuesday. The stock had previously closed at $37.53, but opened at $34.72. ON shares last traded at $34.60, with a volume of 4,423,963 shares changing hands.

Key ON News

Here are the key news stories impacting ON this week:

• Positive Sentiment: Q3 earnings beat analyst estimates, while sales grew 17.2% year over year to CHF 931.4 million. Direct-to-consumer sales rose 25%, and net income increased 36.9%. Article: On Holding AG Stock Slides Despite Strong Q3 Earnings and DTC Growth
• Positive Sentiment: Cantor Fitzgerald initiated coverage with an “overweight” rating and a $46 price target, implying potential upside from the cited share price. Article: Cantor Fitzgerald Stock Recommendations
• Negative Sentiment: Investors may be discounting the durability of the earnings beat: Q3 gross margin benefited from CHF 52.6 million in U.S. tariff refunds, a one-time boost that may not recur. Article: On Holding Falls as Investors Look Past Q3 Beat
• Negative Sentiment: On reiterated its full-year 2026 sales-growth outlook in the low-20% range at constant currency, rather than raising guidance after the quarter. Wholesale growth of 13.2% also lagged DTC growth, adding to concerns that momentum may be uneven. Article: On Holding Falls as Investors Look Past Q3 Beat

Analyst Ratings Changes

ONON has been the subject of several analyst reports. Jefferies Financial Group reissued an "underperform" rating on shares of ON in a research note on Tuesday, October 20th. KeyCorp reaffirmed an "overweight" rating on shares of ON in a research report on Monday, September 28th. Citigroup reaffirmed a "buy" rating on shares of ON in a report on Wednesday, September 23rd. Weiss Ratings upgraded ON from a "hold (c-)" rating to a "hold (c)" rating in a research report on Thursday, October 8th. Finally, Bank of America reduced their price objective on ON from $46.00 to $43.00 and set a "buy" rating for the company in a research note on Thursday, September 17th. Two investment analysts have rated the stock with a Strong Buy rating, twenty-three have assigned a Buy rating, five have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, ON presently has a consensus rating of "Moderate Buy" and a consensus target price of $43.81.

ON Stock Down 8.2%

The firm has a market capitalization of $22.00 billion, a P/E ratio of 23.41, a P/E/G ratio of 0.76 and a beta of 2.05. The stock has a fifty day moving average price of $31.67 and a two-hundred day moving average price of $36.47. The company has a debt-to-equity ratio of 0.25, a quick ratio of 2.25 and a current ratio of 2.83.

ON (NYSE:ONON - Get Free Report) last announced its quarterly earnings results on Tuesday, August 11th. The company reported $0.35 earnings per share for the quarter, missing analysts' consensus estimates of $0.42 by ($0.07). ON had a return on equity of 22.92% and a net margin of 12.09%. The company had revenue of $1.05 billion for the quarter, compared to analyst estimates of $1.09 billion. During the same quarter in the previous year, the company posted ($0.09) earnings per share. The firm's revenue for the quarter was up 13.5% compared to the same quarter last year. Research analysts forecast that On Holding AG will post 1.50 EPS for the current year.

Insider Activity

In related news, insider Olivier Bernhard bought 65,000 shares of the business's stock in a transaction that occurred on Friday, August 14th. The shares were acquired at an average cost of $30.67 per share, with a total value of $1,993,550.00. Following the completion of the purchase, the insider directly owned 5,228,184 shares in the company, valued at $160,348,403.28. The trade was a 1.26% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, CEO Caspar Coppetti bought 65,000 shares of ON stock in a transaction dated Friday, August 14th. The stock was purchased at an average price of $30.67 per share, with a total value of $1,993,550.00. Following the completion of the purchase, the chief executive officer owned 2,440,855 shares in the company, valued at $74,861,022.85. This trade represents a 2.74% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing.

Institutional Inflows and Outflows

Several institutional investors have recently bought and sold shares of ONON. Banco Santander S.A. lifted its position in shares of ON by 47.4% during the third quarter. Banco Santander S.A. now owns 41,030 shares of the company's stock valued at $1,215,000 after purchasing an additional 13,200 shares in the last quarter. NINE MASTS CAPITAL Ltd bought a new stake in ON during the 3rd quarter valued at $296,000. Intech Investment Management LLC purchased a new stake in ON during the 3rd quarter worth about $421,000. Carlson Capital L.P. purchased a new stake in shares of ON in the third quarter worth about $3,245,000. Finally, Vista Capital Partners Inc. purchased a new stake in ON in the 3rd quarter worth approximately $594,000. Institutional investors and hedge funds own 36.39% of the company's stock.

ON Company Profile

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.