Shares of On Holding (NYSE:ONON) climbed in early trading on Wednesday, after the company Tuesday reported upbeat second-quarter results.
Here are some key analyst takeaways:
- Needham analyst Tom Nikic reaffirmed a Buy rating, while cutting the price target from $62 to $52.
- Telsey Advisory Group analyst Cristina Fernández maintained an Outperform rating and price target of $65.
- BTIG analyst Janine Stichter reiterated a Buy rating and price target of $70.
Check out other analyst stock ratings.
Needham: On Holding's APAC (Asia Pacific) revenues grew 109%, representing the fourth consecutive quarter of triple-digit growth, Nikic said in a note. Revenues from EMEA (Europe, the Middle East and Africa) and the Americas region grew 33% and 21%, respectively, he added.
The company's gross margin improved by 510 basis points (bps) year-on-year, above Street expectations of a 10bps contraction, the analyst stated. On Holding raised its long-term outlook to at least 30% revenue growth (CAGR) from fiscal 2023 to 2026, from is prior projection of 26%, he said.
The price target has been cut "as we believe that multiples in the sector have moved structurally lower," Nikic further wrote.
Telsey Advisory Group: On Holding's third-quarter results indicate continued strength in its brand momentum, Fernández said. The company was able to drive demand with "newness and inventory control," without needing to resort to discounts.
On Holding is "becoming more efficient as it gains scale, particularly in distribution through warehouse automation, and is benefiting from lower freight costs, driving stronger profitability," the analyst wrote. She further stated that these positive trends could continue through the fourth quarter and into 2026.
BTIG: On Holding recorded 25% year-on-year revenue growth, "solidly" beating consensus of 20%, Stichter said. Although there was significant investor fear going into the print, the company delivered a broad-based beat and raised its annual outlook.
Management raised their 2025 revenue growth outlook to at least 34%, from the prior guidance of 31%, the analyst stated. "We believe the company is capable of sustaining revenue growth in excess of 20% over the medium-term, the highest among the peer group, which should merit a premium valuation," she further wrote.
ONON Price Action: Shares of On Holding had risen by 3.14% to $42.85 at the time of publication on Wednesday.
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