ONON bullish call by Asymmetric Investing by Travis Hoium

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“Sometimes the negative reactions like we had this week make a lot of sense short term but long-term the stock is actually more attractive than it was a week ago because the valuation is so much better.”

Thesis at the time

Bullish

Travis argues On Holding's stock slump is a strategic tradeoff between growth and premium positioning, not a fundamental breakdown. He believes management's refusal to discount products protects long-term margin potential, and the recent selloff has made the stock more attractive on valuation.

Key arguments

On is maintaining premium pricing and high gross margins (~65%) rather than discounting like Nike and Lululemon did
Operating margin is only 13.8% now but could expand significantly toward Lululemon's ~30% level if management focuses on cost containment
Stock trades at 21x trailing and 17x forward earnings despite a 5-year revenue CAGR of 35%, which looks attractive if margins expand
Growth remains strong in Asia-Pacific (54.7% constant currency) even as US growth slows to 13%

Counter-arguments acknowledged

Revenue growth guidance was cut from ~23% to low-20% for 2026
US market (largest segment) growth is maturing at only 13%
Currency reporting in Swiss Francs has depressed some growth figures

Hedges and caveats (from the video)

Currency headwinds affecting reported results (Swiss Franc reporting)
Historical comparison to Nike and Lululemon may not be directly applicable
On Holding's margin maintenance strategy is intentional and clearly communicated by management
Analysis based on trailing 12-month data with limited public company history