Retired Swiss tennis legend Roger Federer remains a strong presence in the world of tennis — and shoes. Switzerland-based shoemaker On Holding enjoys a close partnership with Federer, who has helped bring in sponsorships of other tennis stars like Iga Swiatek, Joao Fonseca and Ben Shelton, each of whom has made a splash at this year's Australian Open.
Now with Wall Street expecting On Holding to deliver triple-digit earnings growth for 2024 when it reports full-year results in March, the stock joins the IBD Breakout Stocks Index as it teases a new buy zone.
On Holding Runs Onto IBD 50 Screen
Born in the Swiss Alps, On Holding began by making running shoes. It has since expanded its lineup to include premium footwear, apparel, and accessories for tennis, outdoor, training and beyond.
Boosted by strong earnings and sales growth, On Holding has earned a spot on the IBD 50. It also stands alongside Tesla on the IBD Leaderboard watchlist.
Although the company posted a 19% year-over-year slowdown in earnings growth to 18 cents per share for the third quarter, analysts forecast 120% growth for 2024.
Helped by its partnership with Federer and the sponsorship deals with tennis stars like Shelton, sales growth has been strong. In the third quarter, revenue rose 43% over the prior-year quarter to $751.9 million.
Over the last eight quarters, sales growth has ranged from 23% to 89%.
See Who Joins On Holding On The IBD Breakout Stocks Index
On Stock Stands Tall Among Peers
In IBD Stock Checkup, On Holding earns a strong 98 Composite Rating, tying Birkenstock. Deckers Outdoor and Skechers are just behind with a 97 and 96 rating, respectively.
In a sign of demand for shares, On stock sports a B+ Accumulation/Distribution Rating and a 1.5 up/down volume ratio. It also has seen eight quarters of rising fund ownership. Plus, 50 funds with an A+ rating from IBD own shares of the shoemaker.
| Company | Symbol | Comp Rating | EPS Rating | RS Rating | SMR Rating | A/D Rating |
|---|---|---|---|---|---|---|
| Birkenstock | BIRK | 98 | 97 | 84 | A | B+ |
| On Holding | ONON | 98 | 89 | 94 | B | B+ |
| Deckers Outdoor | DECK | 97 | 99 | 93 | A | A- |
| Skechers | SKX | 96 | 87 | 82 | B | A |
On Holding Steps Into Buy Range
After finding support at its 50-day moving average, On Holding has established a flat base with a 60.12 buy point. Showing market leadership, its relative strength line stands at a 52-week high, earning a blue dot in MarketSurge.
After briefly notching a new high on Tuesday, On Holding pulled back. On Wednesday, the stock initially rose then retreated, but its base remains intact. It closed the session 3% below the buy point. On Holding earlier cleared a trendline entry around 56.60.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
