1 A top growth stock that may translate 10 times in the next 10 years.

Growth stocks have been riding high in the bull market, but new data on inflation last week put the brakes on the rally. Will inflation continue to rise? Will the Fed cut interest rates? Is a recession still a possibility?

These are the issues that keep economists on their toes, but smart investors will be looking at the long term. Ten years from now, a recession in 2024 will be largely irrelevant. The economy should be growing, if not linearly, and the stock market should be well ahead of where it is today.

That's why it's important to look for stocks with long-term potential, and growth investors should look for great growth stocks that will maximize their investment over 10 years or more.

On Holding (New York Stock Exchange: ONON)The year-to-date increase is 19%, or approximatelyStandard & Poor's 500 It may continue to climb this year, but the long-term outlook is what's really exciting about this stock. It may continue to climb this year, but the long-term outlook is what's really exciting about this stock, which could translate 10 times over the next 10 years. Here's why.

How On Holding Challenges Industry Leaders

On produces premium athletic shoes and apparel. Its CloudTec running shoes and sneakers have a loyal following and are the first choice of a growing number of affluent shoppers.

This company with its headquarters in Switzerland was founded on the idea of developing technologically advanced footwear that would provide athletes with the ultimate in comfort and enhance their athletic performance. These shoes have a unique sole design, just like walking on the clouds, very eye-catching.

On is endorsed by many top athletes, sponsoring tennis champions Iga Swiatek and Ben Shelton, as well as New York Marathon champion Hellen Obiri. Swiss tennis great Roger Federer is a big fan and investor in the company.

On is not just for athletes, however, and its products have gained a following among upscale shoppers who can afford the high price tag. Its designs are truly different from the sneaker benchmarks, and On is making a statement.resonance,Lululemon Athletica respond in singingAdidasThe challenge is to be launched by industry giants such as

Its products are also more expensive than all of them, even more expensive than Lululemon, the High B耑 brand, but its core customers can afford to buy these products - regardless of inflation. That's why it's doing so well despite the tough economic environment.

Year-over-year sales growth in 2023 was 47%, with a rate-neutral growth of 55%, an important distinction to note as currency fluctuations have had a negative impact on its performance, but this is not an accurate reflection of operations.

Profitability is also improving. Antares boasts industry-leading gross margins, improving from 56% in 2022 to 59.6% in 2023, thanks to its high prices and high full-price sales rates. Net income for the full year increased 38% YoY despite a net loss in the fourth quarter.

How Anta realized 10 times growth within 10 years

On is still in its infancy, but its brand influence is expanding globally. It has a strong direct channel to the曏 consumer, a strong wholesale business, and it's getting the word out.

Let's look at the numbers to see if Anta can really translate 10 times in 10 years. Koon's previous guidance was to achieve a 26% Compound Annual Growth Rate (CAGR) by 2026, and with the latest guidance of 30% sales growth by 2024, the company is already on track to exceed that target. Using the 2023 figure and a 10-year 26% CAGR, sales will reach approximately $20 billion in 10 years. A market capitalization of $126 million, or about 10 times the current market capitalization of $10.23 billion, would be achieved while maintaining a constant market cap of 6.3.

Over the next 10 years, the annual growth rate is likely to fall. However, if the economy improves, the annual growth rate will also accelerate, so it is not unreasonable to maintain this average annual growth rate. However, the price-to-sales ratio may decline. Based on 20%'s CAGR, annual sales of $12.4 billion in 10 years would result in a market capitalization of $78 billion at the same price-to-sales ratio, or approximately 7.5 times the current market capitalization.

Where On realizes stable earnings, the stock price is more likely to follow earnings rather than sales, and the P/E ratio better reflects the price movement.

While it is possible that Koon's stock could reach a market capitalization of $100 billion in 10 years, that seems a bit of an exaggeration at this point. But it doesn't seem too much of an exaggeration to imagine that the market capitalization should be even bigger in 10 years. If investors can focus on that and take a long-term view, On could be a great stock to consider right now.

Should you invest $1,000 in On Holding now?

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Jennifer Saibil does not own any of the stocks mentioned above. the Motley Fool holds recommended Lululemon Athletica and resonance. the Motley Fool recommends On Holding, which recommends the following options: resonance January 2025 $47.50 call options long. the Motley Fool has a disclosure policy. the Motley Fool has a disclosure policy. The Motley Fool has a disclosure policy.

1 Top Growth Stock That Could Translate 10x in the Next 10 Years was originally published by The Motley Fool.