ONON reported earnings on August 11 and the market delivered a brutal verdict: the stock fell 20% in a single session to $30.91, erasing nearly a fifth of its market value on a day when the Street scrambled to reprice the growth story.
The analyst response has been swift and uniform in direction, if not in magnitude. Every major firm that touched the stock in the 24 hours following the print lowered its price target — Stifel cut from $60 to $41, Baird from $70 to $55, BTIG from $70 to $60, and Evercore ISI from $46 to $40, all while maintaining positive ratings. Barclays trimmed from $46 to $42 but kept Overweight. Raymond James went a step further, downgrading from Strong Buy to Outperform and cutting to $38. The mean target now sits at $36.90, implying roughly 19% upside from current levels — a gap that reflects the Street's broad conviction that the selloff overshot, even as everyone acknowledges the print was disappointing. The bull case — DTC growth, Asia-Pacific expansion, full-price discipline — remains intact on paper. The bear case — product concentration above 90% in running shoes, margin pressure from heavy investment, consumer spending risk — just got louder.
Short interest tells a genuinely interesting story here, and it has flipped direction from the pre-earnings setup. The previous note on ONON flagged 22.2 million shares short at 7.4% of the float heading into the print. That position has now unwound sharply: short interest dropped 10% on the day of the earnings release to 19.6 million shares, bringing SI as a percentage of free float down to 6.5%. The move suggests shorts covered into — or immediately after — the print, locking in gains from a position built through the summer. Borrow conditions remain completely relaxed. Availability is running at 1,850% — meaning there are roughly 18 shares available to borrow for every one already lent out — and the cost to borrow is just 0.62%, barely changed on the week. There is no squeeze pressure, no borrow squeeze dynamic, nothing in the lending market to force further short covering.
Options positioning is notably calm given the scale of the price move. The put/call ratio is 0.87, fractionally below its 20-day average of 0.89 and well within the year's normal range. The z-score is essentially flat at -0.46. That absence of options alarm — no spike in put demand, no elevated hedging — is either a sign that the market had already priced in downside risk before the print, or that options traders are not yet convinced the selloff is over enough to chase protection at these levels.
The founder buying from May stands as a notable data point against the current backdrop. Three co-founders and co-CEOs collectively purchased shares around $35.97–$36.75 in mid-May — around $4.4 million of net insider buying across the group — at prices now above where the stock trades today. Those purchases, flagged in the prior note as a confidence signal, now look more like a floor test than a prescient call. Baron Capital was also an active accumulator as of June 30, adding nearly 5.6 million shares in the quarter. Meanwhile close peers were not spared this week — AS fell 6.5% and DECK dropped 3.7% — but neither came close to ONON's magnitude of decline, reinforcing that the move was earnings-specific rather than sector-wide.
The next earnings event is flagged for November 10. Between now and then, the question is whether the revised analyst targets — clustered in the $38–$55 range — act as a ceiling on any recovery, or whether the gap between the current price and even the most bearish Street view creates enough of a cushion to draw in fresh buyers at a stock now trading at a trailing PE of roughly 16x and an EV/EBITDA of under 10x.
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