On's growth accelerated for the fourth straight quarter — people call it hype, I call it a revolution. Despite tariff uncertainties, management raised their full year sales guidance. Management intends to raise prices to mitigate tariff pressures — they expect no demand destruction from this.
The market still doesn't know what to make of the new tariff impact, which makes a lot of sense because there's still so much uncertainty. Although the U.S. and China have agreed to a 90-day pause on the newest tariffs, which would slap significant tariffs on goods between U.S. and China, there's still an increase in tariffs on Chinese products that stands today at 30%.
On Holding (ONON -0.54%) is being hit by tariffs like everyone else, but the company's response is unique. Management has said it will raise prices, which will keep profits coming in.
Identifying up-and-coming brands can be a profitable investment strategy. There are promising new businesses starting to gain the attention on Wall Street in the restaurant and athletic wear industries.
ONON delivered outstanding Q1 results, with 40% constant currency sales growth and margin expansion. Guidance was upgraded to 28% constant currency sales growth for 2025, but currency and tariff risks warrant close monitoring. My DCF valuation suggests ONON is trading around fair value; I recommend holding, but would accumulate on any pullback.
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