On the four Ms, On Holding AG earns 65 for management and 69 for moat. The management score rests on a return on invested capital of 16.6% and a gross margin of 62.8% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.36x equity.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 15.0% a year, below the 48.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 30.0x. That produces an intrinsic value of $43.04, a 10-CAP price of $16.19 and a payback time price of $25.55, with the value zone set at the highest of the three, $25.55. Today's price of $30.20 sits 18% above it.
The price is above the value zone and the business scores 69 for moat and 65 for management. Neither test argues for paying up here.
| Price | $30.20 |
| Market cap | $10.1B |
| P/E ratio | 21.1x |
| Return on invested capital | 16.6% |
| Gross margin | 62.8% |
| Debt to equity | 0.36x |
| Free cash flow yield | 2.1% |
| Growth rate used | 15.0% |
| Growth rate measured | 48.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Buy price |
| Skechers U.S.A. (SKX) | 75 | $36.55 |
| Deckers Outdoor (DECK) | 97 | $135.30 |
| Crocs Inc (CROX) | 59 | $227.21 |
| Nike Inc. (NKE) | 16 | $16.10 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of On Holding AG rather than accepting ours.