1 Exceptional Growth Stock to Buy Right Now

President Trump's new economic policies are spooking the markets, and the S&P 500 index has been trending downward after starting the year with a bang. The new tariff program could have a substantial impact on many public companies, both U.S. companies that import supplies as well as foreign companies that export to the U.S.

Investors don't enjoy seeing the market lose gains, but this could present some buying opportunities for the savvy investor. The market has been looking expensive lately, and this might be the reset you've been waiting for.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

If you're looking for an incredible growth stock with massive opportunities, consider On Holding (NYSE: ONON). It just reported another fabulous quarter, but its stock is down year to date, and this looks like a great time to buy the stock.

Why On

On sells sneakers and other athleticwear, but it's differentiated from similar companies by its distinctive sole design. At this point, it has many products that don't look different from any other brand, but people know it for its original On Cloud shoe.

As a premium brand, On targets an affluent clientele. But it's resonating with a mass audience through its athlete endorsers, who run the gamut of professional sports and might only be recognizable to those "in the know" about these sports, as well as a strategic partnership with actress Zendaya.

It's still rolling out across the world, and it has low brand awareness in many locations. However, it's growing quickly in the areas where it's launched. That gives it an incredible market opportunity and a long growth runway.

On has consistently reported strong operating results. That would be impressive on its own, but even more impressive is that it's at a time when inflation has been hitting pocketbooks, and many companies' results -- including other premium athleticwear brands like Nike and Lululemon Athletica -- are feeling pressure. That implies On's constituency is resilient, and that it might be pulling market share from competitors.

This past week, On released a blowout fourth-quarter earnings report, beating its own and Wall Street's expectations. Revenue increased 40% year over year (currency neutral), with a 49% increase in direct-to-consumer sales. On has a careful mix of direct-to-consumer and wholesale channels, as well as a robust digital presence. It also has 50 physical stores in strategic locations that it feels are a ballast of the network, where customers get to see it in real time.

It has the highest gross margin in the industry, and it's getting higher, increasing from 60.4% to 62.1% year over year. It charges premium prices, and as its name catches on worldwide, its more affluent target customer is willing to pay for its products, strengthening the margins.

Down to the bottom line, net income increased 436% from a loss the previous year. Earnings per share (EPS) were $0.33, beating Wall Street's average consensus of $0.18.

Why now

On stock was lifted on the excellent report, but it's still down 8% year to date. At the current price, it trades at a forward 1-year P/E ratio of 32, which looks quite reasonable for a growth stock.

Management said that it's still working with the strategy it outlined in its 2023 investor presentation, the pillar of which is generating brand awareness. The other elements are expanding its global footprint, innovating with product, and maintaining operational excellence. It made great strides in all of those areas last year, but there's plenty more to accomplish this year and beyond.

One area that's incredibly promising is outside of footwear. Shoe sales increased 39% year over year in the fourth quarter, while apparel was up 83% and accessories were up 86%. That means customers are loving its brand right now, not just its shoes.

Management is guiding for sales to increase 27% in 2025, ahead of its previous guidance. If inflation chills, On's results could stay elevated. As it amplifies its brand and expands its reach, On could be a standout stock this year and beyond.

Don’t miss this second chance at a potentially lucrative opportunity

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*Stock Advisor returns as of March 3, 2025

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica and Nike. The Motley Fool recommends On Holding. The Motley Fool has a disclosure policy.