On Holding AG (ONON) | News Based Sentiment Analysis

• On September 24, 2025, On Holding AG reported Q2 2025 net sales of CHF 749.2 million ($736 million), a 32% year-over-year increase, but experienced an adjusted net loss of CHF 29.7 million due to CHF 139.9 million in foreign exchange losses. Despite missing revenue forecasts of CHF 816.29 million, the stock rose 5.4% to $48.19, indicating investor confidence in the company's long-term potential.
• Following the Q2 results, On Holding AG raised its full-year guidance on September 24, 2025, anticipating net sales growth of at least 31% (constant currency) and projecting total revenue of CHF 2.91 billion ($2.92 billion). This positive revision, along with improved gross margin and narrowed adjusted EBITDA margin guidance, signals management's confidence in navigating currency challenges.
• Institutional investors continued to show support throughout September, with Triangle Securities Wealth Management purchasing 15,030 shares on September 27, 2025, and earlier in the month, Panoramic Capital LLC and KADENSA CAPITAL Ltd. increasing their stakes on September 8th and 7th respectively. Cinctive Capital Management LP also invested $6.77 million on September 6, 2025, demonstrating strong backing from larger funds.
• Despite the overall positive outlook, analyst sentiment was mixed towards the end of the month. Raymond James downgraded the stock from "strong-buy" to "outperform" on September 27, 2025, setting a $66.00 price target, while Jefferies assigned an "underperform" rating with a $40.00 target. However, Barclays raised its target to $69.00 with an "overweight" rating, resulting in an average target price of $64.20.
• The Direct-to-Consumer (DTC) channel continued to be a key driver of growth, reaching new highs with 41.1% of Q2 sales coming through DTC, a 54% year-over-year increase as of September 24, 2025. This DTC growth enhances brand control, pricing power, and improves margins, aligning with management's commitment to sustainable growth and DTC expansion.
• On September 26, 2025, the company reported a CHF 40.9 million net loss, primarily due to currency fluctuations and tariff pressures, despite the strong revenue growth. The full-year sales guidance was revised to CHF 2.91 billion, and analysts estimate a potential 25-30% increase in the cost of goods sold due to tariffs.
• Looking ahead to November 11, 2025, On Holding is expected to report Q3 earnings with a projected EPS of $0.34, a 100% year-over-year increase, and revenue of $941.57 million, a 28.16% rise. However, the stock dipped -3.3% to $42.47 on September 26, 2025, underperforming the S&P 500, and is currently trading below its estimated fair value of $54.48 as of September 22, 2025.

The Investment Story: September was a month of mixed signals for On Holding AG, with strong sales growth and raised guidance offset by currency headwinds, earnings misses, and diverging analyst opinions. Despite these challenges, continued institutional investment and a thriving DTC channel suggest underlying confidence in the company's long-term prospects.

What It Means for Investors: Investors should anticipate continued volatility due to currency fluctuations and potential tariff impacts. While the mixed analyst ratings create some uncertainty, the company's strong DTC performance and institutional support provide a solid foundation for future growth. The current trading price below estimated fair value may present an opportunity for long-term investors.

Looking Ahead: Investors should closely monitor the Q3 earnings report on November 11, 2025, paying attention to the impact of currency fluctuations and tariffs on profitability. Tracking the company's progress towards its 26% CAGR target and the continued growth of the DTC channel will also be crucial.

The Bottom Line: On Holding AG remains a compelling growth story with a strong brand and expanding market presence, but investors should be prepared for potential near-term volatility. The company's commitment to DTC expansion and sustainable growth, coupled with ongoing institutional support, positions it well for long-term success.