Yahoo Finance Earnings Beat: On Holding AG Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
It's been a mediocre week for On Holding AG (NYSE:ONON) shareholders, with the stock dropping 16% to US$27.51 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of CHF376m were what the analysts expected, On Holding surprised by delivering a (statutory) profit of CHF0.13 per share, an impressive 59% above what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for On Holding
Following the latest results, On Holding's twelve analysts are now forecasting revenues of CHF1.77b in 2023. This would be a substantial 26% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 69% to CHF0.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of CHF1.73b and earnings per share (EPS) of CHF0.41 in 2023. So it seems there's been a definite increase in optimism about On Holding's future following the latest results, with a nice increase in the earnings per share forecasts in particular.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$34.04, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on On Holding, with the most bullish analyst valuing it at US$41.59 and the most bearish at US$19.12 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that On Holding's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 36% growth on an annualised basis. This is compared to a historical growth rate of 72% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.2% annually. So it's pretty clear that, while On Holding's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards On Holding following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for On Holding going out to 2025, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for On Holding (1 shouldn't be ignored!) that you need to take into consideration.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
