Why On Holding’s latest results matter for investors

On Holding (ONON) drew attention after releasing first quarter 2026 results alongside fresh full year guidance, combining current performance data with management’s expectations for at least 23% net sales growth on a constant currency basis.

Despite upbeat first quarter figures and the new guidance, the stock’s 7 day share price return of 6.95% contrasts with a year to date share price decline of 19.38% and a 1 year total shareholder return decline of 36%, while the 3 year total shareholder return is 44.69%. This suggests that longer term holders have still seen gains even as recent momentum has cooled.

If this kind of earnings driven move has your attention, it can be useful to see what else is gaining interest in adjacent areas such as 20 top founder-led companies

With the stock down over the past year yet trading about 30% below one estimated intrinsic value and around 41% below one analyst target, you have to ask: is there a mispricing here, or is the market already baking in future growth?

Most Popular Narrative: 32.9% Undervalued

With On Holding last closing at $37.85 against a narrative fair value of $56.41, the gap between current pricing and projected potential is clear and worth unpacking.

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.

Curious what kind of revenue trajectory, margin uplift, and future earnings multiple need to line up for that fair value to make sense? The narrative blends rapid earnings growth, expanding profitability and a premium valuation that still assumes compression from today’s level.

Result: Fair Value of $56.41 (UNDERVALUED)

However, the story can change quickly if premium pricing starts to pressure demand, or if heavy marketing and expansion spending prevents margins from progressing as analysts expect.

Another way to look at On Holding’s valuation

That 32.9% gap to the narrative fair value leans on earnings forecasts and long term assumptions, but the current 39.4x P/E tells a different story. It sits well above the US Luxury industry at 21.3x and above a 28.7x fair ratio that the market could drift toward over time.

If earnings do not live up to those optimistic forecasts, a move closer to either peers or the fair ratio would mean a much lower share price than the narrative suggests. Which yardstick do you trust more right now: the story, or the multiple?

Next Steps

If the mixed signals in this story have you torn, it is worth checking the underlying data yourself and deciding where you stand. To see what investors are currently optimistic about, take a closer look at 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.