Federer hits a ball in the Stock Exchange

Swiss tennis player Roger Federer. AELTC / Simon Bruty / Getty Images

The company On has gone public launched.

Shares in the Swiss sneaker company, backed by Roger Federer, soared 50% on its New York debut on Wednesday, and its valuation has soared to $ 11 billion.

The tennis master bought a stake in the company two years ago valued at the time at $ 54 million, according to various Swiss newspapers.

Since then, he has had a stellar trajectory, driven mainly by the rise of

in the pandemic.

Sales are up 60% year-on-year and the pace may have increased further this year: Revenues in North America, On's largest market, have doubled from the prior year in the first half.

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That said, the $ 11 billion valuation, equivalent to 13 times On's projected sales this year, seems overkill. Nike, with a current value of $ 249 billion, is trading at 5 times this year's sales. For its part, Lululemon, manufacturer of irresistible yoga pants for those who follow fashion, with a value of 54,000 million dollars, trades less than 9 times. If On were valued at Lululemon's projected revenue multiple for next year, he would have to double his revenue in the next 12 months.

The recent performance of On shows that it is possible.

But you will always be at risk of running into trouble.

On finds the tubular sponges on the soles of his $ 200 shoes give him an edge.

But the market for high-tech sneakers is very crowded.

In addition to Nike, Asics, Adidas, and other upstart companies like Brooks Running, are consciously investing in their own models to run faster.

Manufacturing almost exclusively in Vietnam, currently immersed in a severe COVID-19 wave, is another risk.

And there are doubts about its prospects in China.

Not that Federer is going to worry too much.

Assuming he has kept his shares, another ace should be aimed at him.

For more information: breakingviews.reuters.com. The authors are columnists for Reuters Breakingviews. Opinions are yours. Translation is the responsibility of EL PAÍS