Interested to know which two I bought for my ISA and feel are worth considering? Read on.

Swiss engineering

On Holding (NYSE:ONON) is the Swiss company behind the premium running shoe brand. I was sceptical about this stock because I’ve seen other athleisure brands go from market darlings to serial underperformers.

Think Under Armour and Lululemon. They’re down 74% and 57%, respectively, in five years as they succumbed to competitive pressures and growth evaporated.

Competition is a key risk for On too. New challengers could emerge and grow fast, threatening the brand’s staying power. Fashion can be very fickle.

So, why this one? Well, after digging in, it became clear that On is like an engineering firm that happens to make trainers. It goes to incredible lengths with its performance-focused design, and its patented CloudTec cushioning system sets it apart in a crowded market.

Plus, its LightSpray technology involves robots making/adding a new upper for a super-trainer in just three minutes. No stitching nor massive assembly lines. On just opened its second automated shoe facility, in South Korea, adding another 32 robots.

The founder-led company plans to bring robot-spraying factories to other continents too. This could slash shipping times, reduce logistics costs, and navigate tariffs.

LightSpray is a pinnacle example of how On continues to innovate through Swiss Engineering, dramatically changing the way we can create high-performance shoes with unmatched efficiency, sustainability, and performance results.
Co-founder Caspar Coppetti.

In 2026, the company expects net sales to increase at least 23% on a constant currency basis. Considering the consumer backdrop, that would be impressive.

Meanwhile, profit margins are strong, boosted by premium prices. Its new LightSpray Cloudmonster 3 Hyper trainers, which are made for serious runners, cost £270 a pair!

Finally, the valuation looks very reasonable, with a forward price-to-earnings (P/E) ratio of 24. That’s not expensive for a high-margin disruptive growth company.

UK stock

Now for the FTSE 250 with Applied Nutrition (LSE:APN). The UK sports nutrition brand sells over 120 different products, including protein powder, high-performance hydration drinks, and various supplements.

In the six months to 31 January, revenue soared 56.5% to £74.5m and adjusted EBITDA jumped 55.8% to £21.5m. There was solid growth across Europe, Latin America and Asia, while a factory extension will increase revenue capability to £300m (up from £107m last year).

Rising inflation is a risk to near-term growth, both in terms of sales to consumers and costs for raw ingredients. Meanwhile, the Iran war is disrupting supplies to Middle East customers.

However, the long-term growth story looks attractive. It’s expanding shelf space with existing retailers, winning new customers, entering different markets (GLP-1-friendly ready meals with Morrisons, for example) and expanding overseas.

With a fairly modest forward P/E of 18, I reckon this growth stock deserves attention.

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However, in some cases, the sell-off just gives investors an opportunity to buy high-quality growth stocks at discounted levels. Here are two that I like today.

On Holding

The first stock is On Holding (NYSE:ONON). This is the Swiss running shoe and sports clothing brand that has defied the gloomy consumer spending environment, even while charging premium prices.

Between 2020 and 2025, sales surged from the Swiss franc-equivalent of $453m to $3.8bn. Profit margins have also expanded and are now industry-leading due to the firm’s premium pricing power. On’s gross profit margin is 63.9% versus 51.6% for Adidas and 42.7% for Nike.

But are the years of heady growth about to come to an end?

Well, net sales on a constant currency basis are expected to be at least 23% this year. Given the current backdrop, that would normally be considered fantastic for a sports brand. But coming off the back of 35.6% growth last year, this deceleration has disappointed Wall Street.

Beyond slowing growth, there could be some margin pressure this year from increased marketing spend, currency fluctuations, and tariffs.

Meanwhile, in an unexpected change in the C-suite this week, On announced that two co-founders would take over as co-CEOs. So this has created more uncertainty.

The stock’s down 30% year to date. Based on 2027 forecasts, On is now trading at 17.5 times forward earnings, translating into a price-to-earnings-to-growth (PEG) ratio of 0.75. Remember, anything below one is seen as potentially undervalued.

Longer term, I’m still bullish here. On was founded on the “principle of relentless innovation“, and we can see this in its CloudTec cushioned trainers and LightSpray manufacturing process, which makes laceless, robot-sprayed super-trainers in three minutes.

Apparel sales jumped 68.2% last year, but there’s a blue-sky opportunity to sell far more clothes. And On is a rare Western brand enjoying surging sales across Asia Pacific, its fastest-growing region.

Earlier this week, I took advantage of the dip and bought more shares.

3i Group

Turning to the FTSE 100 now, we have private equity firm 3i Group (LSE:III). The share price has fallen off a cliff — down 30% in a month and 47% since October.

The catalyst for this has been Action, the Dutch discount retailer that makes up a whopping 70% or so of 3i’s assets. Not content with its 3,300+ stores across 14 European countries, Action will enter the hyper-competitive US market by the end of 2027 or early 2028.

Now, this expansion will obviously need a fair bit of capital, and isn’t guaranteed to pay off. North American has long been a graveyard for European retailers — ask Tesco and Marks and Spencer.

A few months back, 3i stock was overvalued, trading at a wild premium to its underlying net asset value (NAV) per share. But after crashing back down to earth, it has swung to a double-digit discount.

I think that’s very attractive for this high-quality business, which has a fantastic track record of buying, building, and selling unlisted businesses.

Now carrying a 3.4% dividend yield, the stock’s well worth considering while it’s under 2,400p.

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So which stocks are currently unloved? Well, worried about AI disruption, the market has rotated into value, leaving a lot of high-quality growth shares out of vogue.

As such, here are two stock dip-buying opportunities worth checking out.

Better insulated from AI risk

Let’s start with Netflix (NASDAQ:NFLX). The stock had sold off heavily since last summer, as investors worried about the streamer’s attempt to buy Warner Bros. Discovery for a colossal sum.

The company has now abandoned this debt-fuelled bid, sending its share price up more than 20% in recent days. However, at $95 per share, this still leaves Netflix almost 30% off its June high of $134.

As mentioned, AI is weighing on growth stocks. Some investors fear the technology makes content creation far easier, potentially enabling rivals to emerge with endless free AI content.

My view is this risk is overblown. Instead, I think people are quickly growing tired of ‘AI slop’, and that the high-quality content that Netflix creates with those quaint, flesh-and-blood human actors isn’t going out of fashion.

I reckon Netflix subscriptions will prove very resilient — and trend upwards over time, boosting profits.

Moreover, I think AI should benefit the firm rather than hurt it. For example, it should lower content creation costs, not necessarily by replacing human actors and writers, but by cutting production waste and improving dubbing and localisation technology.

AI should also improve high-margin advertising solutions and content discovery. Ad revenue is expected to roughly double in 2026, while Netflix expands into podcasts, cloud-first gaming, and live sports.

JPMorgan analysts agree, saying they “believe storytelling and talent will remain critical moats, ultimately better insulating Netflix from AI disruption risk compared to transactional business models“.

Netflix stock isn’t cheap today (it very rarely is). But I see no evidence that its ambition to become a $1trn company over the medium term — a more than doubling from today — is about to be derailed by AI.

Taking market share

Next, we have On Holding (NYSE:ONON), the Swiss premium sportswear brand. As I write, the stock is down 12% today (3 March).

This despite the company growing sales 30% to 3bn Swiss francs (roughly $3.8bn) last year. On a constant currency basis, revenue grew 35.6%, which is exceptional given the tough consumer backdrop.

So, what’s the problem here? The 2026 guidance for 23% sales growth, representing a deceleration from 2025. This figure is slightly below Wall Street’s expectations — shock, horror! — and currency changes present risks.

However, the strong ongoing growth indicates that On continues to take market share from legacy brands Nike and Adidas, due to its focus on innovation and high-performance footwear. Sales across Asia Pacific skyrocketed 96.4% last year.

Meanwhile, the gross profit margin increased to 62.8% from 60.6%, boosted by its premium positioning. And On expects this to rise to at least 63% this year.

The company is opening robotic factories to make its cutting-edge LightSpray running shoes, which over time should help insulate its profits from tariff uncertainty and supply chain disruptions.

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This FTSE 100 stock was due a breather!

But Rolls-Royce has flown out of the traps, with a 9.5% gain, making it the sixth-best performing Footsie share so far this year.

However, the stock’s now trading at 39 times 2026’s forecast earnings. At this lofty valuation, everything will have to go right this year for it to keep powering on. And that’s obviously not guaranteed, with geopolitical tensions high and ongoing supply chain challenges.

As such, I see more interesting opportunities elsewhere in the market right now. Here’s one of them.

Taking market share

On Holding (NYSE:ONON) is the Swiss firm behind the sportswear brand that has taken the world by storm over the past three years.

In 2025, the company expects sales to have risen 34% at constant currency to around 3bn Swiss francs ($3.74bn, at the current exchange rate).

Considering the industry downturn that has seen Nike and other sportswear brands struggle, this is a remarkable performance. It tells us that the brand is taking share in a tough market because customers love the products.

Premium positioning

Wall Street expects another 20%+ jump in sales in 2026 and 2027, with an even stronger growth in profits. And this growing profitability is really attractive, with On positioning itself as the world’s most premium sportswear brand.

Unlike most other brands, On doesn’t discount, which is translating into industry-leading margins. Its Cloudmonster Hyper trainer line can cost as much as £260 a pair, while its Cloudboom Strike LS (LightSpray) racing shoes go for even more.

In future, management sees further margin expansion as it aggressively moves into apparel and opens more retail stores. Apparel typically carries higher gross margins than footwear, and the firm’s in the very early innings of capturing this global opportunity.

What [premium] really does, it really sets ourselves apart from the mass market where…there’s a lot of competition. And this allows us to actually charter our own path and not just fish in the same pond like everyone else.
CEO Martin Hoffman

Innovation-driven

When I think of my best-ever investments (particularly Nvidia, Intuitive Surgical, and Axon Enterprise), they’re extremely innovative companies. I see something similar here.

For example, the company’s LightSpray technology involves a robotic arm spraying a continuous filament onto a mould. The entire upper of the shoe is created in just three minutes rather than hours of manual labour! 

On plans to open robot-led factories close to major retail markets rather than permanently relying on Asian manufacturing. If successful, this would result in quicker production, faster shipping, less carbon footprint, and perhaps even higher margins in future. 

Valuation

One future risk I see is a drop-off in manufacturing quality. After all, folk aren’t paying top dollar for cool products to be disappointed, so excellence is expected but not necessarily guaranteed.

Meanwhile, Hoka provides competition in high-end running shoes.

Still, at 25 times 2027’s forecast earnings, I think the stock’s well worth considering. If On can grow its current 1% share of the global sportswear market to 3% or even 5%, there could be significant returns for investors today.

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As a result, I’ve done quite a bit of portfolio repositioning, at least by my own buy-and-hold standards. Here are seven moves I’ve made in my ISA in recent weeks.

Three tech stocks I trimmed

After an incredible three years, artificial intelligence (AI) as a stock market theme has run into uncertainty. Prominent investors like billionaire Ray Dalio argue that AI spending is absolutely in a bubble. But he says “we don’t have the pricking of the bubble yet.”

In other words, there’s no sharp catalyst (yet).

To reduce risk, I locked in some profits on two AI stocks that soared to all-time highs a few weeks ago. These were chip designer Nvidia, which I pared back when it hit $200 per share, and chipmaker Taiwan Semiconductor Manufacturing.

Another tech share I trimmed was e-commerce enabler Shopify. This stock has really roared into life, gaining over 150% in just 18 months.

As such, it has also become very expensive, so I recently sold some shares at $160.

Now, I should say that I haven’t liquidated this trio entirely, as I’m still bullish on them long term. Shopify, for example, just reported that its merchants generated a record-breaking $14.6bn in sales during the Black Friday and Cyber Monday sales.

Three disruptors

Unfortunately, not all of my sharers have done so well lately. Two that have struggled include cross-border payments firm Wise and language learning leader Duolingo. They’re down 19% and 36%, respectively, year to date.

Even after these drops, this pair aren’t conventionally cheap (and this adds risk if their growth rates slow). Even so, I think the market is currently underestimating their long-term growth potential, and this allowed me to scoop up more shares on the cheap.

A third stock I added to was On Holding. This is the Swiss sportswear brand that’s growing very quickly, especially in Asia.

On charges top whack for its premium gear, which more affluent consumers have been happy to pay up for, despite ongoing cost-of-living risks. This is translating into impressive margins and earnings growth.

I reckon all three shares are worth checking out.

A new stock

Finally, I bought a new stock: Beeks Financial Cloud (LSE:BKS). It provides specialised cloud computing and connectivity solutions for financial firms, helping them deploy trading systems and connect to exchanges.

Customers include the stock exchanges of Canada, Mexico, and Australia, as well as crypto exchange Kraken.

Now, this is only a starter position. That’s because Beeks is a small British enterprise with just a £163m market cap. And its quite a capital-intensive business, so any setback could tip it back into the red.

That said, I’ve been impressed with the regularity of the contract wins. Just this month, Beeks has announced three new contracts – a $1.5m Private Cloud deal with a major Canadian bank, a £1.9m Exchange Cloud contract with a South African bank, and a £4m Proximity Cloud extension with an FX broker.

Looking ahead, analysts expect a significant uptick in profits. Yet the stock is down 25% since February, offering what I see as an attractive entry point to consider.

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On

First up is On Holding (NYSE:ONON), the Swiss firm behind the premium sportswear brand.

The stock’s down 33% since January due to tariff uncertainty and weak consumer spending. Both these challenges are obviously not ideal for the business.

Yet, they haven’t held back the brand’s impressive growth trajectory. In the first nine months of 2025, net sales increased 32.6%, or 37.3% on a constant currency (CC) basis. This came from both direct-to-consumer (+39.2%) and wholesale (+33.1% at CC) channels.

Sales are surging worldwide, with very impressive growth in Asia Pacific. Net sales were up 115.3% there in the first nine months.

The brand’s premium positioning — based on “craftsmanship, precision and design excellence” — is also driving industry-leading margins. A gross margin of 62% is well above Nike‘s 42%, as the company continues to have success targeting a more affluent customer.

I’m not really a big spender, but I did recently buy a pair of On’s next-gen Cloudvista 2 running shoes. I have to say, they’re amazing, and I can see why they’re quickly becoming the gold standard among runners. The New York Marathon women’s winner this year ran in a pair of On trainers.

That said, I did baulk at the firm’s £105 jogging bottoms recently at JD Sports. I opted for the cheaper Adidas ones instead.

Again though, the premium price tags aren’t stopping growth, as the company sold over 1m apparel units in a single quarter for the first time in Q3. And as it opens more stores in major cities, management sees a huge opportunity to grow apparel sales.

For 2026, On expects for sales growth of at least 23%, though it tends to offer conservative guidance. So the figure could well be higher.

Right now, the stock trades for 29 times forward earnings, falling to 22 by 2027. That’s not expensive for a fast-growing firm sporting premium profit margins and eyeing a long runway of growth.

Filtronic

Turning to the UK, we have Filtronic (LSE:FTC). It develops and manufactures radio frequency systems and components. 

The share price took off like a rocket (pun intended) last year when Filtronic announced a partnership with Elon Musk’s SpaceX to supply modules for the ballooning Starlink constellation. However, it’s pulled back 23% since the summer.

The SpaceX tie-up‘s already resulted in record orders for the £285m market-cap company. But the downside to this is that it’s increased customer concentration risk significantly.

Put simply, if anything goes wrong with the SpaceX partnership, the stock would be in big trouble.

Nevertheless, it’s worth pointing out that the firm’s having success diversifying its customer base. In July, it inked a £13m contract with defence giant BAE Systems, and earlier this month won a €7m multi-year contract for a European satellite constellation programme.

The stock’s trading at 34 times forward earnings. While not an obvious bargain, it could fly much higher in the years ahead, with Filtronic perfectly positioned to capture more SpaceX and defence contracts.

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In fact, I’ll buy more shares soon and aim to hold them for at least five years. Here’s why I’m bullish.

Filling the void

Founded in 2010, On is a Swiss brand known for high-quality running shoes. It experienced significant growth during lockdown as offices and gyms shut, prompting a surge in outdoor running.  

In 2020/21, Nike took the ill-fated decision to prioritise sales via its own channels, reducing the volume of items shipped to wholesale partners. As the pandemic eased, On’s trainers filled the void in stores, and the brand has grown strongly ever since.

Another record quarter

The company aims to be the world’s most premium sportswear brand. As such, it doesn’t engage in discounts and won’t even be doing any for Black Friday.

To be fair, it doesn’t need to. Q3 sales rose 24.9% year on year, or 34.5% on a constant currency basis, beating Wall Street’s expectations. The gross margin increased to 65.7% from 60.6%, while earnings grew strongly.

Growth was broad-based, but Asia Pacific stood out, with sales rocketing 109%. This was the fourth consecutive quarter of triple-digit growth in the region. 

Looking ahead, management raised full-year guidance for the third straight quarter, to 3bn Swiss francs (about $3.7bn). At constant currency, that would be 34% growth. That’s very impressive considering the broader industry downturn.

Innovation

One thing that sets the company apart is an obsession with innovation, which is something Nike and others have struggled with in recent years.

For example, On has developed a patented, cutting-edge manufacturing process called LightSpray. Basically, a robot arm sprays material onto a shoe mould, turning a multi-part process into a three-minute step. This running shoe has no laces or tongue, and weighs just 170g.

Runner Hellen Obiri was wearing a pair when she obliterated the women’s record in the New York City Marathon two weeks ago. 

In spring/summer 2026, we will bring this championship-level technology to everyday runners for the first time with the LightSpray Cloudmonster Hyper. This is our innovation process in action, continuously and obsessively making the best possible products that push the limits of performance.

Executive Chair Caspar Coppetti

Risks

Now, there’s obviously a lot of competition in the sportswear industry. Nike and Adidas aren’t going anywhere, so On will have to keep standards exceptionally high to continue justifying charging more than these brands.

Meanwhile, around 90% of its trainers are made in Vietnam, making higher US tariffs a challenge. The rate is currently 20%, down from 46% before. But who knows where it could go in future.

Attractive opportunity

Summing up, On is a founder-led company taking market share with high-performance products and a premium brand. Sales are soaring, margins are climbing, and the shares trade at just 21 times 2027’s forecast earnings (significantly cheaper than slow-growing Nike).  

Meanwhile, its still early days for its apparel business, and management plans to selectively increase the store count over the next few years.

With the stock down 35% since May, I think this is an attractive dip-buying opportunity to consider seizing. And I plan to do so.

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Now, with the market fully recovered and surging higher, it’s harder to find opportunities. But that doesn’t mean there aren’t any out there.

Here are two growth stocks that I’ve bought in the past week. I think both are worth digging into.

On the money?

The first is a new position: On Holding (NYSE:ONON), the premium sportswear brand. I invested at $41, following a 34% share price fall since January.

In Q2, On’s net sales increased 38.2% at constant currency, with double-digit growth across all geographic regions. This came despite consumer spending weakness and tariff uncertainty, both of which are ongoing challenges to navigate.

But On has managed to navigate them so far. Indeed, the company now expects to achieve a full-year gross profit margin of 60.5% to 61%, and an adjusted EBITDA margin of 17% to17.5%. Both are above previous guidance.

As for valuation, we’re looking at a forward earnings multiple of 27. That strikes me as good value for a disruptive growth company growing sales at 30%.

A Wise move?

The second stock I bought was cross-border payments firm Wise (LSE:WISE). This is a position that I’ve been steadily building, and I snapped up a few more shares when the price recently dropped below £10.

There are a number of reasons why I’m bullish here. Firstly, the firm continues to grow, with cross-border volume rising 27% in constant currency to £41.2bn in its last quarter. Active customers reached 9.8m, up 17% year on year.

Next, Wise is aiming to become the world’s main network for moving money (for consumers, businesses, and banks). This is obviously a colossal market opportunity, valued at around $32trn. And so far, Wise has captured less than 5% of the personal and 1% of the small-medium business markets. Both are expanding, too.

The company is also making great progress attracting banks, due to its faster and cheaper money-moving infrastructure. Blue-chip lenders like Morgan Stanley and Standard Chartered have chosen to use Wise. This year, it has partnered with Raiffeisen and UniCredit.

As our lives become more digital, our financial relationships will extend across borders even more. People work, spend and invest internationally. Businesses now hire and sell everywhere…We’re working to handle trillions, not just billions.

Wise

Another thing I like here is Wise’s disruptive business model. As it grows, it continues to lower its cross-border take rate. This counterintuitive move is designed to keep customers locked in and improve its competitive position.

Now, there’s risk in this model, because it involves sacrificing profit margins in the short term to drive long-term market share. So, if Wise’s quarterly results disappoint, investors might lose patience and sell off the stock.

However, I’m investing here with a horizon of five to 10 years. Over this timeframe, I expect Wise to become much larger.

At just under £10, the shares are trading at 25 times earnings. For a growth company with such a large market opportunity, I think that’s attractive.

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Here are two growth shares that I think are worth checking out today.

Musk backlash

Let’s start with the most topical, which is Netflix (NASDAQ:NFLX). As I type, the stock has fallen over 14% since the start of July.

In recent days, Netflix has come under fire from Elon Musk, who has repeatedly urged followers to boycott the platform. This relates to a transgender character in an animated show from two years ago.

Now, Musk obviously has a very large presence on social media, so it’s theoretically possible that a couple of million outraged followers could cancel their Netflix subscriptions.

However, my suspicion is that this won’t make much of a dent. At the end of 2024, when the company stopped reporting user growth, it had over 301m subscribers worldwide.

Besides, all this has probably come too late to impact Q3 numbers. It may show up in Q4 figures if this story rumbles on, but the main growth driver at Netflix nowadays is ad revenue. And that’s unlikely to stop rolling in over this issue, in my opinion.

Strong growth

Later this year, Netflix will air the final season of Stranger Things and Guillermo del Toro’s Frankenstein. Will fans really boycott such shows because of a transgender-related row on X? Possibly. But again, I reckon none of this matters to the long-term investment case.

In Q2, revenue rose 16% to $11.1bn. The operating margin came in at a very healthy 34.1%, while the full-year revenue forecast was increased slightly to $44.8bn-$45.2bn. That would represent solid growth of 15%-16%.

Advertising revenue is forecast to double this year, while the cheaper ad-supported tier should tempt in more subscribers as the long winter nights set in. Speaking of which, I’m going to watch House of Guinness over the weekend.

Netflix stock isn’t cheap (it never has been). But at 36 times next year’s earnings — falling below 30 by 2027 — I wouldn’t call it obviously overpriced. I only see Netflix getting stronger.

Rising sportswear star

The second growth stock I reckon is worth a look is On Holding (NYSE:ONON). This is the Roger Federer-backed premium sportswear brand.

The share price is down 30% since the end of May.

Now, it’s worth highlighting that this probably relates to the ongoing tariff uncertainty and weak sales across the sportswear industry. These both add an element of risk moving forward.

Despite this challenging backdrop, On is managing to grow at a rapid clip. In Q2, sales surged worldwide, resulting in a 32% increase overall (38.2% on a constant currency basis). Margins actually increased due to the firm’s premium pricing strategy.

For the full year, management expects sales to increase at least 31%. And the company sees a massive future opportunity to increase its apparel/accessories sales, as well as its share of the global premium footwear market.

As for valuation, we’re looking at a forward earnings multiple of around 27. That’s not very expensive for a profitable firm growing its top line at more than 30%!

As such, I plan to buy this growth stock for my ISA in the coming days.

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Of the 27 analyst teams covering the stock, 24 rate it as a Strong Buy or Buy (or their jargony equivalents like Outperform or Overweight). Two rate it a Hold, while a solitary broker has it down as a Strong Sell (there’s always one!). 

Their 12-month share price targets average out at $66.81, which is 57.5% above the current share price of $42.39. As always, I should point out that these are just estimates, not predictions. 

Nevertheless, it’s an emphatically bullish consensus. So let’s take a closer look.

Premium sportswear brand

For those unfamiliar, On is a Swiss sportswear company. As is the way with many companies from Switzerland (think Rolex and Breitling watches or Lindt chocolate), this is a premium brand. It’s associated with high-quality running trainers.

However, the firm is growing its apparel business rapidly and has big ambitions. On the Q2 earnings call, co-founder and Executive Co-Chairman David Allemann said: “Our vision goes far beyond footwear. Our apparel business is expanding very fast and with it, our relevance as a full sportswear brand…The seed for the most premium global multi-sports brand is planted.”

The company’s Q2 net sales jumped 32% year on year — or 38.2% at constant currency — to 749.2m Swiss francs (around $830m). Apparel sales surged 75.5% at constant exchange rates.

Unlike many brands, On is having a lot of success in Asia, where net sales rocketed 111%. And sales even more than doubled in Greater China. This part of the world has been a slog for many brands recently, but seemingly not for On.

The company reported adjusted EBITDA of 136m Swiss francs, translating into an 18.2% adjusted EBITDA margin, up 220 basis points. The gross margin is very strong at 61.5%, reflecting its premium pricing. For context, Nike‘s gross margin is roughly 43%.

Q3 is also off to the races, with July being the strongest month in the brand’s history, according to management. Also in that month, Iga Świątek won Wimbledon, thrashing Amanda Anisimova 6-0, 6-0 while wearing On’s sportswear. That can’t have done the brand any harm!

Issues

That said, Q2 wasn’t perfect. The firm missed analyst expectations for adjusted earnings per share, which it blamed on a weak US dollar versus the Swiss franc. So currency fluctuations can negatively impact the bottom line.

Also, US tariffs are a headache because the firm manufactures in Asia. Yet, so far, it has been able to absorb these quite comfortably due to its premium brand and pricing power. But they add sector uncertainty.

I’m buying

The fact that the company’s growth is being achieved against a backdrop of extremely weak consumer spending is very impressive.

I’m tempted to say that what we’re witnessing here is the emergence of a young Nike. But there are differences, because On says it’s positioned “somewhere between a sports brand and the fashion brand“. It’s building towards a “high-margin profile” business.

Down 33% since January, the stock is trading at 27.5 times forward earnings. At this valuation, I think On is worth considering, and I’m keen to buy it for my own portfolio.

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