• If you are wondering whether On Holding's current share price reflects its true value, this breakdown will help you line up the story the numbers are telling.
• The stock recently closed at US$34.54, with returns of 4.7% decline over the past week, 0.7% decline over the past month, and 26.4% decline year to date, while the 1-year return sits at 29.4% decline and the 3-year return at 1.9%.
• Recent coverage has focused on how the stock's pullback contrasts with its longer term performance, raising questions about whether expectations have reset or if investors are reassessing risk. This context is important when you weigh up what you are paying today versus what you might be getting in terms of future potential.
• On Holding currently has a valuation score of 1 out of 6, which means it screens as undervalued on just one of six checks. The next sections will walk through the main valuation approaches investors use, and then finish with a way to interpret valuation that goes beyond a single score.

On Holding scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: On Holding Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business could be worth today by projecting its future cash flows and then discounting those back to a single present value.

For On Holding, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flows reported in CHF. The latest twelve month free cash flow is CHF 278.78 million. Analyst and extrapolated projections see free cash flow figures between CHF 419.90 million in 2026 and CHF 780.11 million in 2035, with CHF 568 million in 2028, where estimates from analysts end and Simply Wall St extrapolations begin.

When these projected cash flows are discounted back and added together, the model arrives at an estimated intrinsic value of US$40.88 per share. Compared to the recent share price of US$34.54, this implies a 15.5% discount, which indicates that the shares are trading below this DCF estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests On Holding is undervalued by 15.5%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Approach 2: On Holding Price vs Earnings

For profitable companies, the P/E ratio is a useful way to link what you pay for each share with the earnings that business is currently generating. It helps you see how many dollars investors are paying today for one dollar of current earnings.

What counts as a “normal” P/E ratio depends on two big factors: growth expectations and risk. Higher expected earnings growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk usually points to a lower, more conservative P/E.

On Holding currently trades on a P/E of 43.87x. That sits above both the Luxury industry average of 19.54x and the peer group average of 30.09x, suggesting investors are paying a higher price for each dollar of earnings than these benchmarks.

Simply Wall St’s Fair Ratio for On Holding is 29.38x. This is a proprietary estimate of what a “reasonable” P/E could be, given factors such as the company’s earnings growth profile, industry, profit margins, market cap and key risks. Because it adjusts for these company specific drivers, the Fair Ratio aims to be more tailored than a simple comparison with industry or peers.

Comparing the current P/E of 43.87x to the Fair Ratio of 29.38x indicates the shares screen as overvalued on this metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose Your On Holding Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives are introduced as a simple way for you to connect your view of On Holding’s story with a set of revenue, earnings and margin assumptions, turn that into a Fair Value, then compare it to today’s price to help decide whether to wait or act.

On Simply Wall St’s Community page, Narratives let you pick or create a storyline for On Holding, tie it directly to a forecast, and then see an implied value that updates automatically when fresh information such as news, earnings or guidance is added to the platform.

For example, one On Holding Narrative could lean closer to the more cautious fair value near US$42.09, another could line up with a more upbeat view around US$81.43. By comparing each Fair Value with the current market price you can quickly see which storyline matches your own expectations and risk tolerance.

Do you think there's more to the story for On Holding? Head over to our Community to see what others are saying!

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.