Nike may turn, but On and Hoka appear to be widening their moats, and cleaner economics with more durable advantages are preferable. Nike's FAST Graphs chart is one of the ugliest in a while, raising the question of how much of its moat remains. Possible catalysts are product innovation, a wholesale recovery, China stabilization and cost savings. On is taking market share, and street observation in New York showed On and Hoka standing out on people's feet. x.com  x.com  x.com 

On Holding trades at about 16.5x forward earnings after a roughly 52% drawdown. x.com 

On Holding holds zero interest now that its growth has slowed too much and all the founders have left. It would still be preferable to Nike or Lululemon, but retail and apparel are best avoided altogether. x.com  x.com 

Nike's brand concerns look priced in; stabilization, not sudden revenue acceleration, is what the speculative long needs. A few good campaigns and a return to large stores could help, though China consumers will be a drag. Short-term EPS is a poor indicator, and customers may return after trying other brands. x.com  x.com 

On Holding could rerate quickly from 9 times forward EBITDA back to 20 times if its growth decline slows or reverses, possibly in early 2027, while it holds premium gross margins. Over the past two quarters it deliberately held prices and protected its premium positioning, pulling back from wholesale toward direct-to-consumer. Its apparel business is growing 84%, small now but a clear sign its category expansion is working. x.com 

On Holding looks likely to be dead money for a while after its first-ever guide-down sent shares down 19%. Revenue missed, guidance was soft and wholesale growth slowed, and part of the weakness may reflect Nike starting to recapture market share. x.com 

On Holding is the better business to own: when you can pay a few more turns of valuation for higher growth, don't think twice. Deckers, which Michael Burry killed, is the contrast. x.com 

Nike's turnaround is going to take longer than expected, so its earnings no longer anchor the valuation. It may be time to value Nike as a sum of its brands rather than on EPS; at some point that collection will become underpriced, much as Tapestry did during Covid. x.com 

Nike is a rebound dog with years of overhead resistance and disgruntled holders, so buying more of the clear market leaders makes more sense. It may come back at some point, but per IBD, leaders tend to keep winning on structural advantages while investor psychology is warped toward beaten-down laggards that look cheap. x.com  x.com 

Nike's decline comes from products that lost their edge while competitors caught up. It focused on campaigns, and nobody remembers the last Nike shoe that mattered; On and Hoka filled the gap, and On signing Mbappé shows who is gaining. Sales are flat, earnings are shrinking, and China sales fell 26%. At $33 the stock is cheap versus history, but the turnaround needs proof first. x.com  x.com  x.com  x.com  x.com  x.com  x.com