On Holding and Crocs: Growth Potential Excites Investors

Footwear companies On Holding and Crocs report significant growth, with On Holding seeing 28% revenue growth and expansion in apparel, while Crocs projects 7-9% growth. Their prospects for brand expansion and international markets offer potential for stock price increases.

Date: 09-09-2024

AI Rating: 7

Overview of Growth Indicators

Both On Holding (NYSE: ONON) and Crocs (NASDAQ: CROX) are showing strong performance indicators that could positively affect their stock prices.

On Holding

On Holding reported a notable 28% revenue growth in Q2, primarily driven by its popular Cloud running shoes. The company is also experiencing significant growth in its apparel segment, marking a 63% increase in Q2. Although apparel currently accounts for less than 4% of total sales, this sector holds potential for expansion, especially with ongoing brand promotion through new collaborations.

Additionally, On Holding is transitioning to a new warehouse in Atlanta to enhance distribution, which is expected to lead to more robust sales once distribution challenges are resolved. The company's forward P/E ratio of about 38.5 reflects high expectations, but a PEG ratio of only 0.8 suggests it may be undervalued given its growth prospects.

Crocs

Crocs is showing resilience after a tough previous year, with its core brand demonstrating solid growth. It projects 7% to 9% revenue growth for the year, indicating a positive trend despite issues faced with the HeyDudes brand. The company has been proactive in its growth strategy, expanding into new categories and leveraging collaborations with luxury brands.

Furthermore, Crocs reported a remarkable 70% increase in Chinese sales during Q2, signalling a strong international market potential. The emphasis on turnaround strategies for the HeyDudes brand further adds to Crocs’ appeal as a growth stock.

Stocks: ONON CROX