Investing.com — Needham on Friday initiated its coverage on On Holding AG (NYSE:) with a “buy” rating and a target price of $64.

Brokerage said On has shown industry-leading growth, with impressive revenue increases and healthy margin expansion. The company is likely to keep growing as it increases brand awareness and gains space with top sneaker retailers worldwide.

“We believe the company has a continued runway for strong growth, as they increase brand awareness and gain shelf space with the biggest and best sneaker retailers in the world,” analyst Tom Nikic wrote in the note.

Needham analyst noted that Roger Federer-backed On was valued at 5 times its expected 2025 revenues, which make stock may seem expensive but strong fundamentals could support continued stock momentum.

“Although valuation metrics are lofty, we believe the shares can continue to exhibit momentum as long as fundamentals”

ON is the fastest growing company in Needham’s coverage, with expected 32% revenue growth in 2024. Its Direct-to-Consumer (DTC) growing 43% year-to-date, compared to 24% growth for wholesale sales.

Brokerage highlighted despite this growth, the brand’s awareness is still relatively low. In major markets like the U.S., U.K., France, and Australia, awareness was under 10% a year ago. However, it’s increasing rapidly, with U.S. awareness doubling to around 20%, and tripling in France.