On Holding AG (ONON, Financial), a prominent player in the Manufacturing - Apparel & Accessories industry, has recently experienced a significant uptick in its stock performance. Over the past week, the company's stock price has surged by 24.18%, and over the last three months, it has gained an impressive 18.94%. Currently, On Holding AG boasts a market capitalization of $12.29 billion. According to GuruFocus's valuation, the stock is fairly valued, with a current price of $38.49 compared to a GF Value of $35.63. This valuation is based on historical multiples, past performance adjustments, and future business estimates.
Introduction to On Holding AG
On Holding AG is a premium performance sports brand that stands out in the market due to its focus on technology, design, and impact. The company offers a range of products including shoes, apparel, and accessories, primarily designed for athletic, casual, or leisure purposes. Unlike many of its competitors, On Holding AG does not directly manufacture its products or raw materials but relies on third-party suppliers and contract manufacturers. This business model allows for flexibility and innovation in product development. 
Assessing Profitability
Despite its impressive market performance, On Holding AG faces challenges in maintaining consistent profitability, with a Profitability Rank of 3/10. However, the company's operating margin stands at 9.37%, which is higher than 74.66% of its peers. Additionally, its Return on Equity (ROE) is 11.68%, and Return on Assets (ROA) is 7.63%, both metrics outperforming the majority of competitors. The Return on Invested Capital (ROIC) is particularly strong at 16.99%, ranking higher than 90.64% of peers. Despite these strong indicators, On Holding AG has only been profitable for two years over the past decade. 
Growth Trajectory
On Holding AG has demonstrated robust growth metrics that highlight its potential for future expansion. The company's 3-Year Revenue Growth Rate per Share is an impressive 22.00%, outperforming 84.83% of its industry peers. Looking ahead, the estimated Total Revenue Growth Rate for the next three to five years is projected at 26.10%, which surpasses 98.77% of competitors. However, it's important to note that the 3-Year EPS Growth Rate has declined by 84.90%, a figure only better than 3.03% of peers. This indicates some volatility in earnings, which potential investors should consider. 
Notable Shareholders
On Holding AG's stock is held by several prominent investors. The top holder is Ron Baron (Trades, Portfolio), who owns 3,394,195 shares, representing 1.06% of the company. Following him is Bill Gates (Trades, Portfolio) with 500,000 shares, and Ray Dalio (Trades, Portfolio) holds 86,358 shares. These significant investments by well-known financial figures could be seen as a vote of confidence in the company's future prospects.
Competitive Landscape
On Holding AG operates in a competitive industry, with key rivals including Birkenstock Holding PLC (BIRK, Financial) with a market cap of $8.95 billion, Skechers USA Inc (SKX, Financial) with a market cap of $10.48 billion, and Crocs Inc (CROX, Financial) with a market cap of $8.6 billion. These companies are closely matched in terms of market capitalization, which underscores the competitive environment in which On Holding AG operates.
Conclusion
In conclusion, On Holding AG has shown remarkable stock performance in recent months, bolstered by strong growth metrics and solid profitability indicators. While the company faces challenges in maintaining consistent profitability, its strategic focus on technology and design, combined with robust growth forecasts, presents a compelling case for potential investors. The presence of high-profile shareholders and a competitive standing in the industry further enhance its investment appeal. As the market continues to evolve, On Holding AG appears well-positioned to maintain its upward trajectory and capitalize on emerging opportunities within the apparel and accessories sector.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
