"On Holding" makes really cool shoes. Their shoes are so popular that there are more people who want to buy them than they can make. Because there's so much demand and not enough supply, they can charge more money for each pair of shoes. In fact, they're selling their shoes at full price and not putting them on sale very often. This is helping them make a lot of money. Read from source...

"Up 90% and Still Running: On Holding Stock's Remarkable Climb"
AI Zimmerman
October 2, 2024

The recent market turbulence and continued economic uncertainty have not seemed to bother On Holding AG (ONON) stock, which has seen its stock price surge by nearly 90% year-to-date (YTD). The company, which produces highly sought-after athletic footwear, appears to be immune to the struggles facing other footwear manufacturers, such as Nike Inc. (NKE), Crocs Inc. (CROX), and Skechers U.S.A. Inc. (SKX), whose sales have been negatively impacted by decreasing consumer spending.

On Holding's popularity among runners can be attributed to its innovative CloudTec technology, which provides a unique and enjoyable running experience. This Swiss-engineered cushioning technology is composed of cylindrical "cloud" parts located on the shoe's outsole that compress both vertically and horizontally, absorbing impact and providing a soft landing with each step. This technology also has a rebounding effect, converting the kinetic energy generated by each landing into a powerful takeoff.

Recently, On Holding unveiled its LightSpray technology during the 2024 Paris Olympics. This revolutionary manufacturing process takes only three minutes to make each shoe, using a robotic arm that applies liquid polymer material onto an upper shoe mold, instantly solidifying on contact, and creating a completely customized upper weight of only 30 grams, with 75% less carbon emission. This technology eliminates seams, laces, tongue, and heel caps to improve comfort, reduce irritation, and create a shoe that weighs virtually nothing. Hellen Obiri wore LightSpray On shoes to win her second Boston Marathon in 2024.

On Holding's success is not just due to the popularity of its products, but also its ability to manage its inventory effectively. While competitors like Nike have had to deal with contracting sales due to weaker consumer spending, On Holding has not experienced any inventory gluts, but rather, inventory shortages. This allows On Holding to maintain its merchandise at full price, ranging from $140 to $190 per pair of shoes, with very few promotions, which contributes to its high margins.

In the second quarter of 2024, On Holding reported an EPS of 16 cents, which missed analyst estimates by one penny. However, the company's gross profit margin rose by 40 basis points to a robust 59.95%, driven by full-price sales and lower

Neutral

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Positive Sentiment: 0.57
Negative Sentiment: 0.14

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On Holding AG (On) is a Swiss manufacturer of athletic footwear and apparel, particularly known for its innovative CloudTec technology, which provides a soft and responsive ride. The company has seen strong demand for its products, leading to impressive revenue growth and a rapidly expanding customer base.

1. Bullish Case: On's innovative technology and unique design approach have helped it carve out a niche in the highly competitive athletic footwear market. The company's growth has been driven by strong demand for its products, particularly in the running and fitness segments. On has also benefited from the increasing popularity of minimalist and natural running shoes, which are designed to mimic the feel of running barefoot.

On's focus on product innovation, quality, and customer experience has helped it build a loyal following among athletes and fitness enthusiasts. The company's rapid expansion into new markets and product categories, such as apparel and accessories, suggests that it has significant growth potential.

2. Bearish Case: On faces intense competition from well-established players in the athletic footwear market, such as Nike, Adidas, and Asics. These companies have significantly larger marketing budgets and distribution networks, which could make it difficult for On to gain market share.

Additionally, the athletic footwear market is subject to fluctuations in consumer demand, which can be influenced by factors such as economic conditions, fashion trends, and consumer preferences. If the market for minimalist and natural running shoes were to decline, On's growth could be negatively impacted.

3. Risk Assessment: On's strong revenue growth and innovative product offerings suggest that it has the potential to become a significant player in the athletic footwear market. However, the company faces stiff competition from well-established rivals, and the overall market for athletic footwear can be influenced by various factors, such as consumer demand and fashion trends.

Investors should carefully consider the risks associated with investing in On, including the company's competition, market conditions, and product innovation. While On has shown promising growth in recent years, it remains a relatively small player in the overall footwear market, and its long-term success is not guaranteed.

4. Investment Thesis: On's innovative technology and unique design approach provide it with a competitive advantage in the athletic footwear market. The company's rapid expansion and strong revenue growth suggest that it has the potential to become a significant player in this industry. However, On faces significant competition from well-established rivals, and the overall market for athletic footwear can be influenced by various factors, such as consumer demand and fashion trends.

Investors considering investing in On should carefully weigh the risks and potential rewards associated with this company. While On has shown strong growth