Leadership changes at On Holding put global markets and customers in focus

On Holding (NYSE:ONON) is reshaping its senior team, with Rebecca Cai promoted to Chief Global Markets Officer and Alice Delahunt appointed Chief Customer Officer, highlighting management attention on global reach and direct to consumer channels.

For investors, the leadership reshuffle comes as On Holding’s share price, at $37.92, has fallen year to date with a decline of 19.23%. The 3 year total shareholder return of 7.51% points to a mixed longer term picture, while recent 7 day and 90 day share price gains suggest some momentum is rebuilding.

If this kind of leadership driven story has your attention, it can be helpful to see what else is moving in growth areas such as 18 top founder-led companies

On Holding now trades at a sizeable discount to analyst targets and an indicated intrinsic value, yet the stock has fallen over the past year. The key question is whether this caution is sensible or whether the pendulum has swung too far.

Most Popular Narrative: 28% Undervalued

At $37.92, On Holding trades below a narrative fair value of about $52.49, which frames the current leadership changes against a richer long term growth story.

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 sits behind that DTC push and the fair value gap? The narrative leans heavily on revenue growth, rising margins and a future earnings multiple. The exact mix and pacing of those assumptions is where the story really gets interesting.

Result: Fair Value of $52.49 (UNDERVALUED)

However, there are clear watchpoints for On Holding, including its reliance on premium pricing and significant investment in expansion, which could pressure margins if demand softens.

Another view on On Holding's valuation

The earlier fair value of $52.49 for On Holding leans on growth and cash flow assumptions, but the current P/E of 40.8x tells a different story. That ratio sits well above the estimated fair ratio of 29.5x and above both the US Luxury industry at 21.8x and the 24.1x peer average, which points to a richer pricing that could limit upside if expectations change. Which signal do you put more weight on: the cash flow upside or the premium multiple already on the stock?

Next Steps

The mix of leadership change, valuation signals and sentiment around On Holding leaves plenty of room for interpretation, so it makes sense to review the data directly and move quickly on your own judgment. To understand why some investors are still optimistic, 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.