William Blair analyst Dylan Carden has maintained their bullish stance on ONON stock, giving a Buy rating today.
Dylan Carden’s rating is based on On Holding AG’s promising revenue growth and strategic focus on the direct-to-consumer channel, which is expected to be more profitable. Despite initial concerns about a potential weak outlook, the company has guided for substantial revenue growth, surpassing its annualized target rate. The company’s ability to innovate in its product offerings, particularly in the running category, supports its expansion into other categories like apparel and hiking, which is seen as a competitive advantage.
Moreover, On Holding AG’s shares are trading at a valuation that suggests potential for upward revisions and multiple expansions, given the anticipated earnings growth. The company’s appeal to retail partners is expected to strengthen as it continues to expand its brand thoughtfully, even as competitors face challenges with trend lifecycles. The main risk identified is the company’s capacity to continue innovating, though current performance metrics do not indicate this as an issue.