The company
ONON,
+5.66%
called out its product launches during the period, including the Cloudrunner shoe, priced at $140.

“On has always regarded pricing as a brand-positioning tool, and we are using this opportunity to defend On’s premium positioning as other brands are also increasing prices,” Coppetti said.

“This puts On in a strong position to not only absorb some of the expected higher costs in the face of globally rising inflation, but to also reflect inflation in our own 2023 salary rounds as an important retention driver within our teams.”

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On merchandise, which counts tennis great Roger Federer among its backers and shoe inspirations, has been on the feet of marathoners like Tadesse Abraham, who won the Zurich marathon in record fashion during the most recent quarter. The company reported first-quarter profit and sales that beat expectations and raised its guidance.

The company notes that it beat quarterly expectations even as a newcomer to the marketplace.

“Our U.S. business grew 87% versus Q1 2021. UK and Germany grew 54% and 49%, respectively, while China and Japan were up 178% and 148%,” Coppetti said.

“In all of these markets, we are far from majority, nor saturation as many customers are either just learning about On or might have purchased their first piece. And those that have already purchased in 2021 are coming back to buy more, both in our own channels and with our trusted retail partners.”

Stifel analysts are upbeat in their assessment of On’s future.

“On is a unique premium brand with open-ended growth opportunities in the $300 billion and growing global performance/lifestyle footwear and apparel market,” analysts said.

“Brand strength and extensibility will support strong growth and justify a premium multiple for On shares for multiple years, and we view On as a solid core holding for growth investors.”

Stifel rates On buy with a $31 price target, down from $41.

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Still, while the company may ask for a premium price for its premium goods, some analysts are cautious about the company’s premium share price.

“This is essentially the strongest-growth brand in our coverage, and they seem poised to continue beating-and-raising as the year goes on (FY guidance implies growth slows from 68% in Q1 to 37% for the remainder of the year),” wrote Wedbush in a note .

“However, the fact that the stock isn’t being rewarded […] demonstrates
the biggest issue with the shares: valuation.”

On shares fell 4.8% Wednesday before bouncing back on Thursday, up 5.7%. The stock is down 45.2% for the year to date.

Wedbush rates On stock neutral with a $23 price target.

“We view On as one of the world’s fastest growing athletic wear brands and worthy of a premium multiple,” wrote UBS.

“We think On’s growth will surprise the market, keeping its valuation high and driving stock price outperformance.”

UBS rates On stock buy with a $39 price target, down from $50.

“Investors see On as mainly a running shoe brand and don’t fully appreciate the brand’s potential to address a much larger market, in our view.”