On Holding AG Class A Ordinary Shares (ONON)
StalwartFairStock Score: 42/100 — MIXED
Key Financials
| Current Price | $37.26 |
| Market Cap | $11.9B |
| P/E Ratio | 39.22 |
| ROE | 15.5% |
| Dividend Yield | —% |
| Sector | Consumer Cyclical |
Strengths
- Generates $264 million in annual free cash flow (2.2% yield on market cap)
- Solid return on equity of 13.5% above cost of capital
- Conservative balance sheet with debt-to-equity of just 0.32, providing financial flexibility
- Altman Z-Score of 7.0 confirms minimal bankruptcy risk and strong solvency
- Revenue growth of 22.6% demonstrates strong top-line momentum
Concerns
- Trades significantly above Graham Number ($9) with negative 287% margin of safety—limited downside protection
AI Analysis
On Holding AG Class A Ordinary Shares is a mid-cap consumer cyclical company valued at $11.9 billion. The business generates $3.0 billion in annual revenue with a 2.3% net margin and $264 million in free cash flow. From a quality standpoint, On shows Altman Z-Score of 7.0 confirms fortress-level solvency and adequate 13% ROE. On valuation, the stock is commanding a steep 46.4x multiple, with trades far above its Graham Number ($9) with no margin of safety. Growth dynamics show revenue growing at 22.6% and profit growth of -22.9%. Our composite FairStock Score of 42/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.
Bull Case
On's 23% revenue growth trajectory could accelerate as it captures additional market share in the consumer cyclical sector. With $264 million in annual free cash flow (2.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.
Bear Case
At 46x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.
Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer