On Holding Stock (ONON)

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Contributor, Benzinga
December 5, 2023
$32.50
0.30[0.93%]
Last update: 9:28AM (Delayed 15-Minutes)
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Open32.440Close-Vol / Avg.1.702M / 4.854MMkt Cap10.339BDay Range32.385 - 33.30052 Wk Range19.895 - 37.080

Among the most lucrative retail markets in the world, the footwear and apparel industry can transform an organization into a veritable goldmine with one compelling brand. Simultaneously, the high profitability potential of this sector makes it extraordinarily competitive. After all, it doesn't take much to manufacture athletic apparel thanks to current-generation production technologies.

Given the current retail paradigm, sports-themed companies focus as much attention on product quality as they do on branding. And nothing can gin up more excitement than an endorsement from a well-known athlete or media personality. For instance, adidas (OTCMKTS: ADDYY) partnered with Yeezy — a shoe brand that rapper Kanye West developed — in 2013. Just a few short years later, adidas spoke glowingly about the lifestyle collection.

On Holding, a Swiss footwear company focused on running sports has been a publicly traded company since 2021. Backed by tennis superstar Roger Federer — who is both a shareholder and a design collaborator — On Holding has generated tremendous buzz from investors and sports fans alike.

On Holding Financial History

Thanks to the popularity of celebrity-driven retail products, On Holding enjoyed sizable growth and consumer engagement for its core lineup. Off the back of a thawing relationship between the U.S. and China regarding its trade dispute, 2020 looked to be a positive year for the company and other retailers.

Then the COVID-19 pandemic struck, devastating commercial activities as panicked government institutions implemented lockdowns and other desperate mitigation measures. While several countries succeeded in stemming the viral onslaught, the protocols hurt the global retail industry severely — and On Holding was no exception, posting a net loss of 33 million francs (roughly $36 million) in the first half-year period of 2020.

However, the pandemic itself became a blessing in disguise as it inspired millions of white-collar remote workers to get outside and exercise. As a result, Bloomberg reports that On generated a positive net income of 3.8 million francs ($4.2 million) in the six months leading up to June 30, 2021.

While a very encouraging turnaround, prospective investors should be wary of the longevity of the post-pandemic exercise and outdoor activities boom. While the media often touts millennials' penchant for health and wellness, it could actually be a ruse.

For instance, research indicates that obesity risks remain a huge problem among millennials, a strange dynamic if they were indeed the healthy generation. As it pertains to ONON stock, a USA Today report from 2018 labeled the current demographic of workers — which is heavily slanted toward millennial representation — the "indoor generation." 

Nevertheless, Mordor Intelligence reports that in 2023, the global athletic footwear industry reached a valuation of over $110 billion. With experts projecting that this market segment will grow at a 4.63% compound annual growth rate through 2028, it's possible that the sector could command total sales of $140 billion.

Needless to say, that's a massive addressable market for On Holding. 

On Holding Potential

Among the new issues slated for this week, internet traffic statistics imply that On Holding's offering is the most popular — and by quite a healthy margin. This attribute strongly suggests that the Roger Federer connection is potentially a highly lucrative one for the athletic footwear maker. On a near-to-intermediate-term basis, the stock looks set to satisfy early participants.

The global tennis star's appeal cuts across age demographics, with many people across multiple generations knowing of Federer. Such broad-based enthusiasm implies strong revenue potential undergirding ONON stock.

In the longer term, the situation is a bit murkier as it's unknown if the demand spike in outdoor activities will be sustained. But pent-up demand for the "old normal" could possibly maintain interest in sporting endeavors for at least the next few years.

How to Buy On Holding (ONON) Stock

You can accumulate shares of On Holding by completing the following steps.

Step 1: Pick a brokerage.

With most investing platforms today offering identical financial incentives like commission-free trading, you are free to narrow your choice of best brokers to features and attributes that you care most about.

Step 2: Decide How Many Shares You Want

No matter what stock you invest in, it's always unpredictable. To mitigate uncertainties, choose a balanced share count that facilitates upside but also limits downside exposure.

Step 3: Choose Your Order Type

Before trading, acquaint yourself with these market concepts.

  • Bid: The buyer's highest offer.
  • Ask: The seller's bottom-dollar price.
  • Spread: The difference in the bid-ask price, the spread also indicates market liquidity and risk, with tighter spreads indicating a high-volume, low-risk market while the opposite is true for wider spreads.
  • Limit order: Trade requests at a predetermined price; limit orders provide transparency but no execution guarantees.
  • Market order: Market orders guarantee fulfillment but only at the prevailing rate, which typically fluctuates.
  • Stop-loss order: A defensive mechanism, a stop-loss order automatically exits your position at either a predetermined price or anything lower.
  • Stop-limit order: Stop limits are similar to stop losses but only execute (exit) at a predetermined price. However, such orders carry the same non-fulfillment risk as limit orders.

Step 4: Execute Your Trade

To execute a market order, follow these steps:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

A Sports Stock With a Sweet Stroke

On Holding's IPO arrived at an opportune moment and helped the company attract more customers. On Holding is profitable and continues to grow its revenue and earnings. Though competitive headwinds abound in the sports apparel market, On's partnership with Roger Federer has the right catalyst to make it a lucrative offering.

Frequently Asked Questions

Q

Is On Holding a good investment?

A

On Holding has been growing its revenue and earnings in recent quarters. It can be a good investment for individuals who believe the fitness boom is here to stay.

Q

What does On Holding do?

A

On Holding sells sportswear and other products that cater to the fitness crowd.

Q

Is On Holding a risky stock?

A

Every stock carries a degree of risk. On Holding has more risk than most blue-chip stocks but has the potential to outperform them.

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About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.