Shares of On Holding slid 6.9% to $36.87 on March 25, extending a bruising month-long selloff that has erased 14.7% of the Swiss sneaker maker's market value. The catalyst: lingering fallout from the company's March 3 earnings report, which delivered a strong quarter but a jarring forward outlook that forced investors to recalibrate what this stock is actually worth.
• The Numbers Beat, but the Forecast Stung. On projected 2026 net sales growth of at least 23% in constant currencies, implying at least CHF 3.44 billion — a sharp deceleration from the 35.6% constant-currency growth in fiscal 2025 and below analyst consensus of about CHF 3.7 billion. That CHF 260 million gap between guidance and expectations is what drove the stock down 14% on earnings day, and shares fell immediately as the company said it expects its sales growth to slow more than expected.
• A Premium Valuation Needs Premium Growth to Survive. At a forward price-to-earnings ratio (how much investors pay per dollar of expected profit) of roughly 23.8x, On trades at a nearly 50% premium to the retail-apparel industry average of 16.28x. Analysts warn that On's high valuation multiples could lead to profound declines if growth slows as projected — a decrease to the low-to-mid 20% range could result in revenues falling 5% below targets. The stock is effectively priced for the company On was, not the company it's becoming.
• Management Calls It Strategy, Wall Street Calls It Risk. Co-founder David Allemann told CNBC the company is taking a "strategic" approach, saying "we're building a brand for the next decade" and being deliberate about channel penetration and franchise management — calling it "a very strategic premium play." But Jefferies analyst Randal Konik warned that "premium positioning alone may not be enough to sustain price-led growth without risking demand."
• Analysts Still See Upside — If You Can Stomach the Wait. According to 21 analysts, the average rating remains "Strong Buy" with a 12-month price target of $60.38, implying a 60% upside from current levels.
Goldman Sachs recently upgraded On to Buy with a $59 target, arguing the company should grow revenue, EBITDA, and earnings over 20% through 2028. The bull case hinges on margins: gross profit margin hit 62.8%, which is the envy of the industry. But margin strength alone rarely sustains a growth-stock valuation when the growth itself is decelerating.