On Holdings: a sprint to success

On Holding is a Swiss company founded in Zurich in 2010 by the trio of Olivier Bernhard, former Swiss Ironman champion, David Allemann and Caspar Coppetti. I remember seeing their first Cloudracer shoes on the feet of triathlete Nicola Spirig at the 2012 London Olympics. Tennis player Roger Federer took a stake in the company in November 2019, surely his best investment yet. Now listed on the Nasdaq since 2021, On Holdings is a dynamic player in the sports and outdoor footwear sector that is beginning to strike fear into the hearts of Nike, Adidas and Asics. The company stands out for its range of high-performance sports footwear and apparel, sold via the Internet and its own stores. With 95.52% of its sales coming from footwear, On Holding focuses primarily on North America (60.43%) and Europe (28.99%), while expanding in Asia-Pacific and the rest of the world. The company achieved its strongest-ever growth in the running business. Sales have risen from $400 million in 2020 to $1.2 billion in 2022 and $1.8 billion forecast for 2023. The analyst consensus is for sales of around $3 billion by 2025. Financial analysis reveals solid profitability, with a healthy Return on Equity (ROE) of 13.5% estimated for 2023, competitive operating (10.3%) and net (7.3%) margins, and positive free cash flow generation. On Holding AG's balance sheet shows a healthy cash position and an ability to repay its debts, testifying to its financial strength. The management team, led by Marc Maurer and Martin Hoffmann, brings significant experience and proven leadership, contributing to investors' confidence in the company's management. In terms of valuation, On Holding AG trades at multiples that reflect its stratospheric growth. Key ratios such as enterprise value on sales (EV/Sales estimated for 2023 of 5.1x), Price Earnings Ratio (PER of 69x), enterprise value on EBITDA (EV/EBITDA of 33.7x), and enterprise value on free cash flow (EV/FCF 96.9x) are in line with high market expectations for a company with this growth potential. On Holding is well positioned to continue its expansion and strengthen its presence in the global athletic footwear market, supported by a clear strategy, an experienced management team and solid financial fundamentals.

PDD Holdings: a giant in online retailing

PDD Holdings, formerly known as Pinduoduo, is a Nasdaq-listed Chinese company that has revolutionized e-commerce with its innovative mobile platform. Specializing in online sales, PDD Holdings offers a wide range of products, from clothing and accessories to fresh agricultural produce and electronics. The company is known for owning the Temu and Pinduoduo platforms. PDD Holdings' customers are mainly located in China, where the company generates 100% of its sales. This testifies to the company's strong hold on the local market, but also raises questions about the geographical diversification of its revenues. The company's social approach to e-commerce has set PDD Holdings apart and enabled it to grow rapidly. Historically, the company has enjoyed impressive growth, with significant annual increases in sales (5-year CAGR of 87%) and profits (5-year CAGR of 18%). The management team, led by CEO Jiazhen Zhao and COO Jun Yun Xiao, has significant experience in the technology and e-commerce sectors. Their leadership has been a key factor in the company's success. PDD Holdings Inc. is a dynamic company with a proven business model, sustained growth and a solid financial position. Its unique approach to online commerce and capacity for innovation give it a significant competitive edge in the Chinese market and beyond.

E.l.f. Beauty: affordable, profitable beauty

E.l.f. Beauty, based in Oakland, California, stands out in the consumer cyclical sector as a beauty products company. It was founded by Joseph Shamah and Scott Vincent Borba in 2004. With a range of vegan and cruelty-free cosmetics and skincare products, e.l.f. Beauty responds to a growing demand for inclusive and accessible products. Its brands, such as e.l.f. Cosmetics and e.l.f. SKIN, are positioned in several beauty segments, available online and in various distribution channels in the United States, its main market generating 87.55% of its revenues. The company distinguishes itself from its competitors through its commitment to clean, affordable products, a strategy that attracts a loyal and diverse customer base. The historical growth of e.l.f. Beauty's historic growth is testament to its ability to adapt and innovate. Sales have risen from $229.6 million in 2016 to $578.8 million in 2023. CAGR over the last three years is 43.6%. The consensus is for sales to triple over the next three years (estimated sales for 2026 of $1467 million). Financial analysis reveals impressive profitability, with high ROE (25.4% in 2023), high operating (17.4%) and net (10.6%) margins, and solid free cash flow generation (FCF conversion of 162%). The company recently acquired the Naturium brand for $355 million in October 2023. The balance sheet shows a healthy cash position and the ability to repay debt, reinforcing investor confidence. The management team, led by CEO Tarang Amin, benefits from solid experience and recognition for its effective leadership. E.l.f. Beauty, Inc. stands out as a dynamic and profitable company, with a clear strategy and effective execution, offering an attractive value proposition for consumers and investors alike.

Monday.com: A growth driver in the enterprise software world

Monday.com, listed on Nasdaq since 2021, stands out in the technology sector as an Israeli SaaS software company offering a work management platform, monday.com Work OS. This platform enables organizations to create customized software applications to optimize their work processes. This multiplatform solution promotes collaboration by centralizing communication between departments. It offers customizable, integrable and automatable modules for managing a variety of tasks. These modules exploit low-code and no-code approaches, facilitating the use of both internal and external data, via integrations with tools such as Gmail and Slack. It's an easy-to-use, flexible platform. Founded in 2012 by Wix alumni Roy Mann, Eran Kampf and Eran Zinman under the initial name daPulse, the project aimed to offer a fun-to-use, versatile cloud solution. After raising $1.5 million in 2012 for development and marketing, the software was officially launched in 2014 from Tel Aviv, with six customers. A year later, the company already had 3,181 international customers. The rapid growth of monday.com has resulted in a significant increase in sales (CAGR of 65.5% over 3 years) leading to the continuous improvement of the product. Monday.com is positioned as an innovative and fast-growing player in the enterprise software sector, with solid fundamentals and an experienced management team to support its future growth trajectory.

SentinelOne: Innovative cybersecurity

Cybersecurity specialist SentinelOne stands out for its Singularity platform, powered by artificial intelligence, offering autonomous defense against cyberattacks. The Palo Alto-based company serves mainly distribution partners (90.21%) and direct customers (9.79%), with a significant presence in the USA (65.48%) and internationally (34.52%). SentinelOne relies on distributed AI for real-time protection at endpoints and in the cloud. This innovative "land-and-expand" approach gives it a competitive advantage, as it is able to become more deeply rooted in a customer's IT ecosystem and increase its opportunity cost over time. The company has enjoyed dazzling growth, with sales more than doubling recently, and this trend is set to continue over the next three years. Sales are expected to rise from $442 million in 2023 to $1066 million in 2026. However, despite this growth, profitability remains a challenge. ROE is negative, and operating and net margins are under pressure, mainly due to high costs associated with stock option compensation. Nevertheless, free cash flow generation is improving, although the company is still making losses. Analysis of the balance sheet reveals a robust cash position, with the ability to repay debt without difficulty. The management team, led by CEO Tomer Weingarten, is experienced and has proven its ability to navigate a competitive market. SentinelOne represents an opportunity for investors seeking exposure to a fast-growing cybersecurity company with cutting-edge technology, but they should be aware of the risks associated with profitability and high valuation.