Nike (NKE 2.60%) stock continues to falter as the athletic giant tries to find its footing, but its industry peers aren't doing much better. Nike stock is down 15% over the past year, but newcomer On Holding (ONON 2.87%) is down 11%, and Lululemon Athletica has lost half of its value.
Nike and On are two sides of the same coin. Nike represents the established industry leader, while On is the new and exciting start-up. Let's see which one is the better buy today.
Image source: Nike.
Nike: Value and stability
Nike is the undisputed leader in athletic wear, with more sales than all of its direct competitors combined. It has incredible brand power, giving it time to stage a recovery before it needs to worry about another company taking the lead.
It made several missteps over the past few years, including cutting out major wholesale partnerships and focusing on longtime product lines instead of innovation. That left open white space for companies like On to step into the wholesalers framework, capture market share, and innovate with exciting new products. Other brands have also tied their new and improved offerings to align with sport, while Nike let that opportunity pass.
NYSE: NKE
Key Data Points
Under the leadership of new CEO Elliott Hill, Nike is finding its way back. Revenue stayed flat year over year in the fiscal 2026 second quarter (ended Nov. 30), with wholesale revenue up 8%. A new problem is tariffs, which impacted margins, and gross margin dropped 3 percentage points year over year in the quarter.
However, it looks like there's a path toward recovery. Nike also pays a growing dividend that yields 2.5% at the current price. Nike stock trades at 28 times forward one-year earnings at the current price.
On Holding: Growth and potential
On Holding is in high-growth mode. The Swiss-based company, which became known for the distinctive soles on its original On Cloud sneaker, now has a full line of footwear and clothing, and it's taking the premium athletic market by storm.
Sales increased 35% (currency neutral) year over year in the second quarter, driven by direct-to-consumer and wholesale channels. All of its categories were strong, but apparel and accessories more than doubled in the quarter, indicating that the brand is catching on.
NYSE: ONON
Key Data Points
The company positions itself as a top premium brand, giving it resilience under pressure and keeping margins strong. In the third quarter, gross margin widened year over year from 60.6% to 65.7%, and net income rose nearly 290%.
The company has many levers to pull to keep growth strong, including entering new markets and releasing new products. It's also not much more expensive than Nike, trading at 36 times forward one-year earnings. And since it's a young, high-growth company, it may make more sense to look at the enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio, which is 27 -- the same as Nike.
Which is the better buy may still come down to your investing style. Value investors may prefer Nike, while growth investors would choose On. I personally see On as the better buy today.
