ONON has just delivered its most consequential week in months — a 10% rally off earnings, a $1 billion buyback authorization, and a short base that is growing rather than retreating.
The stock closed at $29.39 on September 22, up 7.6% on the day and nearly 10% on the week. The catalyst was the Q2 earnings print released that morning. Yet the short interest data tells a more complicated story. Estimated shares short rose again on September 22, reaching 24.0 million — 8.0% of the free float — up 4.4% on the week and 18% over the past month. That monthly build is the most striking number in the dataset: bears added aggressively through August and into September, held their positions through earnings, and have continued adding even as the stock bounced. This is a considered bearish position, not a reactive one.
The borrow market reflects that build-up without yet flashing distress. Availability has tightened sharply over the past week — from above 950% to 281% — meaning the lending pool is being used faster than it was. That remains well within the normal range, and cost to borrow at 0.58% is negligible, up about 35% on the week but still far too low to inflict meaningful pain on short sellers. The ORTEX short score climbed to 57.7, its highest reading of the past two weeks and up from 44.9 on September 9, the day before the initial short surge. The options market is running slightly more bullish than its recent average, with the put/call ratio at 0.84 — fractionally below the 20-day mean of 0.87 — offering no strong directional signal from the derivatives desk.
The Street's reaction to earnings has been broadly constructive, with recent analyst activity tilting in ONON's favour. Needham's Tom Nikic lifted his price target to $40 from $37 this week while maintaining a Buy. That follows Morgan Stanley reinstating coverage at Overweight with a $39 target on September 10, and BTIG reiterating Buy at $60. BofA trimmed its target to $43 from $46 last week but held its Buy rating — cutting the number while keeping the conviction. The lone dissenting voice is BMO Capital, which initiated at Market Perform with a $28 target, essentially flat to where the stock is trading. The consensus mean sits at $35.61, implying roughly 21% upside from current levels. Bulls point to the brand's DTC-driven margin expansion story and management's stated targets of high-teens to 20% constant-currency revenue growth through 2029. Bears flag a more promotional environment, reduced brand heat, and the macro headwind facing growth-multiple names. The analyst divergence between a $28 floor and a $60 ceiling is unusually wide — reflecting genuine disagreement rather than minor calibration differences.
The ownership picture adds another layer. Co-CEO Caspar Coppetti bought 65,000 shares at $30.67 on August 14 for just under $2 million — a discretionary open-market purchase, not a compensation award, and the most significant insider transaction in the recent history. A cluster of directors received share grants on September 21 (compensation mechanics, not conviction purchases), and the CFO and COO sold small amounts on September 8 — routine, given the modest size. More notable is the institutional register: Baron Capital added 7.2 million shares in Q2 to reach 5.1% of shares outstanding, and Lone Pine Capital entered as a new holder with 13.3 million shares, also in Q2. Both are growth-oriented, long-biased managers — their entries are a meaningful endorsement of the recovery thesis. FMR (Fidelity) has trimmed its stake from 8.1% to 5.4% over the past year, a gradual exit that partly offsets the new arrivals.
On a valuation basis, the trailing PE of 15.1x and EV/EBITDA of 9.3x look undemanding for a brand still growing at double-digit rates — though the forward earnings momentum factor scores tell a softer story, with EPS momentum ranked in just the 24th and 32nd percentiles on 30- and 90-day windows. Among peers, CROX gained nearly 12% on the week and ZGN added 7.8%, both outpacing ONON's 9.8% bounce despite the latter's specific positive catalyst. TPR slipped 3.9% — the only major laggard in the group.
The next scheduled earnings date is November 10. Between now and then, the test is whether the short base — which has stayed elevated through a positive print, a $1 billion buyback announcement, and a 10% rally — begins to unwind or firms further as borrow availability continues to tighten.
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