What's Wrong With On Holding Stock?
2026-10-23 11:15
•Catie Hogan •The Motley Fool
••••• • Axe Cap view
Why On Holding’s Stock Drop Isn’t the Whole Story
On Holding’s share price has faced a sharp drop, but its core business remains remarkably healthy.
On Holding has taken a deliberate hit on wholesale shipments to protect full-price sales, which spooked investors and sent shares down 23% this year. Yet, beneath this short-term pain lies a company with solid fundamentals: direct-to-consumer sales are up 34%, gross margins sit at a strong 65%, and apparel sales jumped 56%. Management’s focus on expanding into football and golf aligns with a $7 billion sales target. The question is whether this temporary slowdown is worth the discount the market is offering. Trading at 21 times trailing earnings with a PEG (price/earnings to growth) of 0.49, the valuation looks attractive compared to peers. The risk? If consumer trends shift or the new sports ventures don’t gain traction, this bet could falter. For South African investors without direct access to ONON, watching USD/ZAR might be safer, as rand moves often dictate appetite for foreign growth stocks. this is just our opinion and not financial advice
For now, watch or wait. The fundamentals are intact, but the wholesale slowdown creates near-term uncertainty. Consider dipping in if you’re comfortable with this risk and the USD/ZAR exchange rate supports foreign exposure.
- ONON
- USD/ZAR
- Prolonged weakness in wholesale channels
- Slower-than-expected growth in football and golf segments
5/10
On Holding's stock has declined 23% in 2026 due to an intentional slowdown in wholesale shipments to promote full-price sales. Despite the near-term headwinds, the company maintains strong fundamentals with 34.3% direct-to-consumer sales growth, 65.4% gross margins, and 56.2% apparel sales growth. Management projects low-20% constant-currency sales growth for 2026 and is expanding into football and golf with a $7 billion sales target. The stock trades at a reasonable 21x trailing earnings with a PEG ratio of 0.49, below analyst consensus price target of $43.55.
Our take is based on reporting first published by The Motley Fool.