Switzerland-based On Holding is Wednesday's IBD 50 Growth Stocks To Watch pick as the top-ranking footwear name nears a buy point of a base. Shares of On were higher by about 0.5% Wednesday amid overall market weakness and are bumping up to a level of resistance.
The IBD 50 stock has paused to catch its breath after climbing 74% from its 52-week low in April.
On Holding makes and sells athletic and running shoes, fitness apparel, and accessories. Its products are sold directly to consumers and through wholesale partners.
It ranks No. 1 out of 11 stocks in the Apparel-Shoes & Related Manufacturing group, which holds a weak 176th spot out of the 197 industry groups that Investor's Business Daily tracks.
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On Stock Pauses In A Base After Jump
The stock is forming the right side of an early-stage, deep cup base with a 64.05 buy point, according to MarketSurge pattern recognition. The entry point is also its all-time high reached Jan. 30.
The base count reset after a breakout from the prior flat base in January didn't progress, and On stock plunged below the low of the prior base. Shares sold off hard in sympathy with Deckers Outdoor after that footwear maker's disappointing revenue guidance.
Shares are finding resistance around the 60 price level after the stock jumped 11.8% in heavy volume following the company's first-quarter earnings report on May 13. A break above the 60 price level could offer an early entry.
The stock is back above its 200-day moving average and its 50-day moving average is starting to rise, a good sign for the stock. Further, its relative strength line reached a 52-week high, as shown by the blue dot on its weekly chart.
On Holding Reports Record Revenue
On Holding reported higher-than-expected first-quarter profit and revenue. It produced record quarterly net sales, reflecting a 43% increase, while profit fell 35% from the prior year.
"We saw On's exceptional momentum from 2024 continue into 2025, delivering strong top-line growth in the first quarter, elevated further by product launches like the Cloud 6 and the Cloudsurfer 2," Martin Hoffmann, Co-CEO of On Holding, said in the earnings release. The footwear maker also raised its full-year 2025 net sales guidance, to at least 28% growth.
Analysts see full-year 2025 earnings climbing a modest 1% then bolting 36% higher in 2026.
The footwear stock's IBD Accumulation/Distribution Rating of A- indicates fairly heavy institutional buying over the last 13 weeks. Also, its 1.6 up/down volume ratio shows positive demand over the last 50 days.
On has IBD Composite and Relative Strength Ratings of 93 each, while its Earnings Per Share Rating sits at 87.
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