ONON Stock Forecast & Price Target

On Holding has demonstrated strong financial performance, with revenues growing by 22.6% year-over-year to CHF 744 million, significantly surpassing consensus expectations. The company's gross margin improved by 180 basis points to 63.9%, reflecting effective management of costs and pricing power in their core athletic shoe segment. Looking ahead, management's 2026 outlook anticipates continued revenue growth, projecting at least a 23% increase in constant currency, which signals sustained demand and potential for expansion in both direct-to-consumer and wholesale channels.

On Holding's financial outlook appears negative due to several factors impacting its earnings potential. The company's recent revenue generation of CHF 680 million and a flattish EBITDA margin of 18.8% fell short of expectations, primarily attributed to the strength of the Swiss franc, which poses a temporary but significant FX headwind of approximately 800 basis points. Additionally, projections indicate that gross margins are likely to contract by over 50 basis points in 2026, driven by a challenging promotional environment, higher markdowns, slowing direct-to-consumer demand, and the introduction of new tariffs, all of which contribute to a less favorable financial climate.