On Wednesday, Baird maintained an Outperform rating on On Holding AG (NYSE:ONON), while increasing the price target to $50.00 from the previous $46.00. The firm's decision follows On Holding's recent financial update for the second quarter, which showed revenues and adjusted EBITDA surpassing consensus estimates by 1% and 5%, respectively. These results were attributed to a stronger wholesale performance and higher profit flow-through.
On Holding confirmed that its direct-to-consumer (DTC) sales have picked up pace, with early third-quarter tracking indicating growth of over 30% following a brief slowdown. Despite challenges posed by currency fluctuations, the company reiterated its full-year EBITDA guidance, suggesting that consensus estimates for the year may remain largely unchanged.
Looking ahead, On Holding has a robust pipeline of anticipated drivers for the second half of 2024 and into 2025, bolstering Baird's confidence in the company's future performance. The analyst highlighted On Holding's culture of innovation as a key factor in achieving industry-leading growth. This, combined with the current uncertain market environment, is believed to support a premium valuation for the company's shares.
In other recent news, On Holding AG exhibited a strong financial performance in its second-quarter 2024 results. The company reported an impressive 27.8% year-over-year increase in net sales, reaching CHF 567.7 million, and a significant rise in net income to CHF 30.8 million. The adjusted EBITDA reached CHF 90.8 million, with a gross margin of 59.9%, an increase from the previous year.
Furthermore, Goldman Sachs has updated its outlook on On Holding, raising the price target to $50 while maintaining a Buy rating. This decision follows the company's robust second-quarter results and the reaffirmation of its full-year 2024 guidance. The company expects currency-adjusted sales growth of at least 30% and net sales of at least CHF 2.26 billion, with a gross margin around 60%.
In addition to its financial performance, On Holding announced the introduction of new technology, including the LightSpray technology. The company also anticipates the launch of new products, such as the Cloudboom Strike and Cloudsurfer Next. These recent developments highlight On Holding's commitment to innovation and growth, backed by strong brand momentum and global partnerships.
InvestingPro Insights
On Holding AG's (NYSE:ONON) recent financial performance has caught the attention of investors and analysts alike. According to InvestingPro data, On Holding boasts a significant market capitalization of $13.16 billion, reflecting investor confidence in the company's market position. The data also reveals a robust revenue growth of 33.66% over the last twelve months as of Q1 2024, underscoring the company's increasing market share and successful growth strategies. Furthermore, the company's gross profit margin stands impressively at 59.87%, indicating efficient operations and strong pricing power.
In line with Baird's positive outlook, InvestingPro Tips highlight that On Holding holds more cash than debt, suggesting a solid balance sheet. Additionally, analysts anticipate sales growth in the current year, which aligns with the company's own projections for a strong second half of 2024 and into 2025. For investors looking for more in-depth analysis, there are over 15 additional InvestingPro Tips available, offering a comprehensive look at On Holding's financial health and future prospects.
As On Holding continues to innovate and lead in its sector, these insights can provide valuable context for investors considering the company's stock. The InvestingPro platform further provides a fair value estimate, which can be a useful benchmark for evaluating the company's current share price and potential investment opportunities.
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