On Holding AG (ONON) Stock Analysis

ONON’s primary competitive advantage lies in its innovation-driven product portfolio, particularly its proprietary CloudTec® cushioning technology and the recently introduced LightSpray manufacturing process. These technologies differentiate ONON’s footwear in both performance and sustainability, supporting premium pricing and strong brand recognition. For example, ONON’s gross margin reached 60.6% in 2024, outpacing most peers—Nike (44.6%) and Adidas (48.5%)—reflecting pricing power and operational efficiency.

Brand positioning is another key strength. ONON has successfully transitioned from a niche running brand to a broader premium sportswear label, with apparel sales surpassing CHF 100 million in 2024. The company’s direct-to-consumer (DTC) channel, now over 40% of sales, enables higher margins and direct customer engagement, compared to Nike’s DTC mix of ~43% and Adidas’s ~37%.

ONON’s grassroots marketing and high-profile endorsements (e.g., Roger Federer, Zendaya) have driven rapid brand awareness, especially among Gen Z, with U.S. brand awareness doubling in one year. Customer satisfaction is reflected in high repeat purchase rates and strong Net Promoter Scores.

However, ONON faces intense competition from established players (Nike, Adidas, Hoka, Lululemon) with greater scale and marketing budgets. Its reliance on third-party manufacturing and a concentrated supplier base (90% of footwear from Vietnam) is a vulnerability. Nonetheless, ONON’s culture of innovation, premium positioning, and expanding global footprint underpin a credible, durable edge in the performance sportswear market.