Nike (NYSE: NKE) stock price is not doing well, making it one of the worst-performing name in the Dow Jones. It has crashed by over 47% from its highest level in 2021 and it formed a death cross on the weekly chart, pointing to more downside. 

The stock has also underperformed Adidas, its biggest competitor, which has surged by over 139% from its lowest point in 2023. Altogether, Nike has risen by 12% in the past five years while the S&P 500 index is up by almost 81% in the same period.

A closer look shows that most industries are being disrupted by newer fast-growing companies. Intel is being disrupted by the likes of Nvidia and AMD while Monster Beverages is facing substantial competition from Celsius Holdings. In fintech, PayPal has been disrupted by BNPL companies like Klarna, Affirm, and Block’s AfterPay.

I believe that On Holding (NYSE: ONON) has a real chance of disrupting Nike and Adidas. The company, which is backed by Roger Federer, has recorded remarkable growth, making it one of the fastest-growing companies in the industry. 

It has reported record sales in seven straight quarters. A look at its financials shows that its financials shows that its total revenue rose to $276 million in 2019. That growth continued and reached over $2.13 billion in 2023.

Analysts believe that its record growth trajectory will continue. The average estimate of 16 analysts is that its revenue will come in at $2.5 billion this year and $3.16 billion in 2026. In contrast, Nike and Adidas are expected to have low single digit revenue growth. 

The most recent results revealed that its revenue rose by 21.9% in Q4, helped by strong traffic in its website and its retail stores. As shown below, there are signs that traffic to its main website continued rising in the first quarter.

On Holding website traffic

Most importantly, On Holding is combining strong revenue growth with a focus on profits. It made a net profit of over $94.2 million in 2023, up from over $62.4 million in the previous year. It had a net loss of $186 million a year earlier.

The company has now set a target to have a CAGR of 26% through 2026. It also believes that it can achieve an EBITDA margin of 18%, up from the 16% -16.5% that it expects to make this year. 

The next important catalyst for the On Holding stock price will be its financial results scheduled for Tuesday next week. Analysts expect the numbers to show that its revenue rose by 18.3% YoY to $547 million in Q1. Its profit per share is expected to be 16 cents. I believe that it will beat these estimates easily.

Therefore, with On Holding, we have a fast-growing company that is seeking to disrupt a huge industry. It has a strong and growing brand and room to grow its margins. As such, I believe that the stock could rebound to over $40 in the coming weeks.

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