On Holding (NYSE:ONON) has become a focus for investors after reporting a record first quarter, raising its 2026 profit margin guidance, and installing returning co-founders as co-CEOs during a broader international expansion.

Despite the strong first quarter and raised profitability guidance, the stock has been weak this year, with a year to date share price return of down 24.62% and a 1 year total shareholder return of down 38.55%, while the 3 year total shareholder return of 26.85% points to much stronger past momentum than the recent pullback suggests.

If this kind of earnings driven story has your attention, it can be useful to widen the lens and look at other growth names using the Simply Wall St screener for 20 top founder-led companies

So with record quarterly results, higher margin guidance and a share price that has pulled back sharply, is On Holding now trading at a discount relative to its fundamentals, or is the market already pricing in the next leg of growth?

Most Popular Narrative: 37.3% Undervalued

On Holding's most followed narrative assigns a fair value of $56.41 per share, compared with the last close of $35.39. This frames the recent pullback in a very different light for investors who focus on long term cash flow potential rather than short term share price moves.

The acceleration in DTC (Direct-to-Consumer) and e-commerce channels, with DTC reaching new highs (41.1% of sales in Q2 and up 54% YoY), gives On more control over brand, pricing, and customer data while increasing gross and EBITDA margins, an operational catalyst likely to further expand profitability as DTC continues its mix shift.

Want to see what kind of revenue and earnings trajectory analysts plug in to justify that uplift, and which profit margins they assume years from now? The narrative leans heavily on premium positioning, international expansion, and a future earnings multiple that stands well above the sector, but the exact mix of growth and profitability behind that fair value might surprise you.

Result: Fair Value of $56.41 (UNDERVALUED)

However, you also need to factor in risks such as premium pricing that may test consumer loyalty, along with heavy spending on global expansion, which could pressure margins if demand cools.

Another View: What The P/E Ratio Is Saying

There is a catch to the undervalued DCF story. On Holding trades on a P/E of 36.6x, compared with an estimated fair ratio of 28.2x, the US Luxury industry at 20.9x and peers at 22.9x. That premium hints at valuation risk if growth or margins land closer to the middle of the range.

For a closer look at how this valuation gap compares with peers and the wider sector, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If the mixed signals on valuation and sentiment have you undecided, do not wait around for the crowd to make up its mind. Instead, take a closer look at the company’s potential upside drivers and review the 3 key rewards

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.