ONON

On Holding AG - Ordinary Shares Class A

Consumer


Presented:05/23/2023
Price:$26.63
Cap:$8.45B
Current Price:$49.39
Cap:$15.81B

Presented

Date05/23/2023
Price$26.63
Market Cap$8.45B
Ent Value$9.81B
P/E Ratio91.11x
Book Value$3.51
Div Yield0%
Shares O/S317.36M
Ave Daily Vol5,138,358
Short Int7.15%

Current

Price$49.39
Market Cap$15.81B
On Holding AG engages in the development and distribution of sports products such as footwear, apparel, and accessories for high-performance running, outdoor, and all-day activities. It sells its products worldwide through independent retailers and global distributors, an own online presence, and its own high-end stores. The company was founded by David Allemann, Olivier Bernhard, and Caspar Coppetti on September 28, 2012 and is headquartered in Zurich, Switzerland.

Publicly traded companies mentioned herein: Allbirds Inc (BIRD), Crocs Inc (CROX), Dick’s Sporting Goods Inc (DKS), Figs Inc (FIGS), Foot Locker Inc (FL), Lululemon Athletica Inc (LULU), On Holding AG (ONON), Skechers USA Inc (SKX), Under Armour Inc (UAA)

Highlights

The presenter is short shares of On Holding AG (ONON), which has benefited from strong secular trends and a well-timed IPO over the past couple years. However, the category is now slowing, and credit card data suggests mid- to high-end consumer spend is also decelerating. Looking out over the next 12 – 18 months, ONON stands out as a business that could underperform its category, and he sees a path reminiscent of past high-growth retail companies that have fallen apart (e.g., FIGS). The Street is modeling 33% topline growth in 2024, which he considers an aggressive outlook, especially when paired with its valuation of 20x consensus 2024 EBITDA. Ultimately, he expects consumer weakness to reverse the pricing ONON gained over the last year or two, leading to 2024 EBITDA that is 25% below consensus and a base case fair value of $20 per share from the current $27.

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Idea Discussion

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