I have been hearing about ONON 0.00%↑ stock for a while now and I thought I would at least get my initial review on the books for my readers.
On the face of it, we have a footwear company competing with the likes of NKE 0.00%↑, DECK 0.00%↑, CROX 0.00%↑ and other footwear companies. You have almost certainly seen those distinctive hollow pod soles.
Even I own a pair of On shoes, which, to be fair, was a gift rather than a direct purchase. My first impressions of the shoe are good. It is comfortable and easy to walk/run in.
So far, so good.
Let’s get down to their business.
ONON 0.00%↑ transformed from a niche Swiss running brand founded in 2010 into a global premium athletic footwear powerhouse. Early backing from tennis star Roger Federer helped put the brand on the map, but proprietary CloudTec cushioning and a disciplined premium pricing model sustained that momentum.
The business targets high-earning runners and lifestyle consumers and distributes through selective wholesale partnerships (58%) and a direct-to-consumer (DTC) digital footprint (42%) as you can seen below.
ONON 0.00%↑ is more a running shoe company than anything else so we have to put more weight on comparisons with NKE 0.00%↑ and other athletic running shoe companies. They sport a market cap of around $10 B, at the time of this writing, whereas NKE 0.00%↑ is closer to $60 B.
They had a massive drop in the stock price after missing analyst expectations of their quarterly net sales estimates in their latest earnings. However, quarterly financials look strong nonetheless.
The corporate performance over recent years shows aggressive scale paired with margin expansion. Revenue has expanded rapidly from $904.24 million in 2021 to $3.76 B in 2025 with a TTM revenue of over $4 B. They needed heavy reinvestment into inventory and supply chain infrastructure, creating temporary bottom-line noise which are now getting sorted out.
Operational discipline has allowed gross margins to climb into the mid-60% range showing continuing resilience and consistency in margin metrics. The balance sheet remains conservative, with current net cash at $844.72 M, demonstrating management avoided over-leveraging during the rapid growth cycles.
The Q2 2026 earnings results highlighted momentum alongside normalizing growth rates. Quarterly net sales reached $1.061 B, marking a 13.49% reported increase and 21.6% growth on a constant currency basis.
Net income expanded to $131.03 million, recovering sharply from a prior year quarterly loss. DTC sales jumped 34%, propelling gross margins to 65.4%.
While wholesale channels in North America experienced slight moderation, full-price sell-through rates remain exceptionally healthy.
Examining the business relative to major category peers reveals distinct operational strengths and valuation trade-offs:
Nike (NKE): NKE 0.00%↑ maintains massive scale, but size creates innovation drag. NKE 0.00%↑ gross margins sit at ~40%, while ONON 0.00%↑ commands 65.4% margins due to full-price selling discipline and direct channels.
Crocs (CROX): CROX 0.00%↑ generates heavy free cash flow and trades at lower valuation multiples. However, CROX 0.00%↑ relies on casual clog designs and not really associated with athleisure, whereas ONON 0.00%↑ operates in the higher-barrier technical running space.
Deckers / Hoka (DECK): DECK 0.00%↑ remains the most direct running competitor. While DECK 0.00%↑ matches brand heat among runners, ONON 0.00%↑ holds a stronger DTC mix and broader lifestyle crossover appeal.
The central thesis comes down to premium brand equity versus the valuation the market is willing to give ONON 0.00%↑.
Looking into future years, analysts are anticipating lower revenue growth in FY 2026 year over year with a steady increase in the years that follow. Gross profit, operating income, net income, EPS, and most importantly free cash flow are all projected to increase steadily as well.
The increase in free cash flow is especially important as it protects their net cash position and allows them to pursue forms of shareholders returns such as reinvestment back into the business, dividends, or buybacks in future years.
16 analysts have a Strong Buy rating while another 7 analysts give ONON 0.00%↑ a Buy rating. The average price target from 28 analysts is $45.5 per share.
However, I should mention that there is a wide range between the price targets with a high around $74.09 and a low around $20.28 with 1 analyst rating the stock a sell as of this writing.
While broader retail spending faces macroeconomic pressures with tariffs, inflation and a war to contend with, the high gross margins and direct relationship control (DRC) really positions ONON 0.00%↑ in a great place for long-term compounding growth.
I’m interested in this stock, but not sure if I have the capital required to fully concentrate the position as I would like in my portfolios. For now I remain on the sidelines until my cash flow allows me to enter investments like these in a meaningful way.
Let me know what you think of ONON 0.00%↑.
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As always my content is not financial advice. Please do your own due diligence before investing any of your money.