On Holdings Sets Up for Marathon Rally: New Highs Are Coming

Key Points

• High-quality On Holdings is setting up for a marathon run that could take its stock price up by triple digits over the long term.
• Growth and operational quality underpin the outlook, with forward estimates suggesting the price can increase by several multiples.
• Institutions are accumulating shares and limiting downside risk in Q2.

On Holdings’ NYSE: ONON share price has its share of headwinds, including macroeconomic pressures, a surprise CEO change, FX conversion, and slowing growth, but these are priced into the market. While headwinds remain, the company continues to perform well, sustaining a high growth pace and widening margins in a world with share for the taking.

Its biggest competitor is Nike NYSE: NKE, and Nike is a long way from reclaiming its lost glory. The takeaway for ONON investors is that the stock trades at a significant discount to its outlook, an outlook that was juiced by its May guidance update, suggesting triple-digit upside for patient investors.

ONON Stock Poised for Significant Near-Term Upside

Between now and then, there is a substantial near-to mid-term opportunity as well. The company not only trades at a discount to its forward outlook, a low-ball estimate, but to its competitor, suggesting price multiple expansion now and over the long-term. Additionally, analysts remain committed to this name, providing a solid support base for accumulating shares. Data tracked by MarketBeat reveals 19 current ratings, a Moderate Buy consensus, and a 79% Buy-side bias.

The price target is the operational detail following the Q1 2026 earnings report, forecasting more than 70% upside from the critical support level. As it stands, the price target has been steady on a trailing 12-month basis (TTM) and is unlikely to change significantly without a change in the outlook. The critical support level is near April lows, just below $32, and is likely to be tested.

Institutional data suggest that support at the critical level is strong and a rebound from there is likely. The institutional group owns only 37% of the stock but has been aggressively accumulating it over the TTM. The data reveals them buying at a nearly $2-to-$1 pace, with activity ramping sequentially to a record high in Q1 2026. The pace remained bullish in early Q2 and will likely remain so given the value proposition. The biggest risk from the sell-side is the insiders, but even that isn’t alarming. Ex-CEO Martin Hoffmann is exiting his stake as part of a prearranged plan triggered by his departure; aside from that, insiders, including the founders/co-CEOs, hold a significant stake and aren’t selling.

On Holdings Raises Profit Guidance After Hot Quarter

On Holdings had a solid Q1 report, with revenue growing by 14.5% year-over-year (YOY), 26.4% on a forex-neutral (FXN) basis, with strength across all channels, geos, and product lines. DTC, the higher-margin segment, grew by 16.4% and 28.7% FXN, while Wholesale grew by 13.3% and 25.1% FXN, with both underpinned by strength in Asia-Pacific (APAC) and Apparel.

Regionally, APAC led with gains of 44.4% and 61.4%, followed by 25.6% FXN increase in Europe, the Middle East, and Africa, and a 13.3% FXN gain in the Americas. Regarding the product channels, the core shoe segment grew by 12.2%, 24% FXN, while Apparel grew by 57.5% FXN to 20% of the business, and Accessories grew by 86.6%.

Margin news was also strong. The company logged improvements at the gross, EBITDA, and net income levels on both a GAAP and an adjusted basis. GAAP and adjusted earnings increased by 82% and 76%, respectively, both ahead of consensus and the impact of Q1 strengths on the outlook. The company cited operational strength and execution as drivers of margin, reaffirming the revenue forecast and raising the full-year margin outlook.

Executives expect an adjusted EBITDA margin in the 19.5% to 20% range, a full 100 bps better than the previous guide, and the revenue outlook is likely cautious. Either way, the revenue guide forecasts a YOY slowdown in growth, but sequential acceleration through year’s end.

On Holdings: A Solid Brand With Catalysts Ahead

While the company’s headwinds are unlikely to ease, including uncertainty and tariff-related cost pressures, there are catalysts in place to drive outperformance. They include strength in DTC, APAC, and Apparel, as well as the LightSpray innovation. It enables rapid, wasteless, automated shoe construction, paving the way to significant margin improvement and operating efficiencies. It uses a robotic arm to spray a mile-long filament onto a shoe mold, which instantly hardens into a laceless upper.

The strength of On Holdings' business and brand is reflected in the balance sheet highlights. The company increased its cash, working capital, current, and total assets while reducing total liabilities. Equity improved by 8.5% on a year-to-date basis and will likely continue increasing as the year progresses.