Investment Opportunity Analysis for Ferrari Stock
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy RACE?
Source: Fool
- Brand Scarcity: Ferrari's order book is filled until the end of 2027, ensuring a deep waiting list that enhances its pricing power and strengthens brand value and market competitiveness in the luxury sector.
- Outstanding Financial Performance: Over the past decade, Ferrari has averaged gross and operating margins of 50.8% and 24.7%, respectively, while net revenue has increased by 149%, demonstrating stable financial growth and profitability.
- Attractive Valuation: With a current P/E ratio of 35.2, below the historical average of 41.1 over the past ten years, the market's overreaction to its long-term growth guidance presents investors with a relatively cheap entry point.
- Market Environment Analysis: Despite cyclical demand and intense competition in the overall automotive industry, Ferrari's unique positioning as a luxury brand makes it attractive amid market volatility, warranting investor attention for potential opportunities.
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Analyst Views on RACE
Wall Street analysts forecast RACE stock price to rise
15 Analyst Rating
11 Buy
3 Hold
1 Sell
Moderate Buy
Current: 356.520
Low
349.74
Averages
448.83
High
555.00
Current: 356.520
Low
349.74
Averages
448.83
High
555.00
About RACE
Ferrari NV, known as Ferrari, is an Italy-based designer, manufacturer and retailer of sports cars that is incorporated in the Netherlands. It operates under the Ferrari brand. Its sports cars portfolio includes, among others, F12berlinetta, FF, Ferrari 488 GTB, 488 Spider, 458 Speciale, Ferrari California T, F12tdf and LaFerrari. The Company also offers financing services through Ferrari Financial Services. It also produces limited series and one-off cars. The Company divides its regional markets in EMEA (Europe, the Middle East, India and Africa), Americas, Greater China and Rest of APAC (Asia-Pacific region, excluding Greater China) and is active in over 60 markets worldwide through a network of authorized dealers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Ferrari's Strong Order Book Amid Stock Repricing
- Strong Order Demand: Despite a stock price decline due to market repricing, Ferrari's order book continues to fill up, suggesting robust demand through next year, indicating that the pullback is more about valuation than the health of the underlying business.
- Slower Revenue Growth: Ferrari has lowered its 2030 revenue growth target to 5% per year, a significant drop from the previous 12% to 17% rates, and reduced its electric vehicle sales target from 40% to 20%, raising market concerns about potential earnings growth slowdown.
- Unique Profitability Model: Ferrari maintains strong pricing power through engineered scarcity and high-margin personalization options, which accounted for about 20% of revenue in recent quarters, resulting in profit margins that most competitors cannot match.
- Healthy Financial Position: The company's industrial free cash flow rose approximately 50% to €1.5 billion last year, with a modest net debt position providing flexibility for electric vehicle development and capital needs, while EBITDA margins are expected to expand to at least 40% by 2030.
See More
Rapid Growth of Chinese Electric Vehicle Market
- Increased Competition: Chinese EV manufacturers like BYD and Geely have overtaken Tesla in global EV sales, demonstrating strong competitiveness of Chinese brands in the global market, which may pressure American automakers' market shares.
- Tariff Policy Changes: Canada has reduced tariffs on Chinese EVs from 100% to 6.1%, although import caps remain, indicating a gradual market opening that could enhance acceptance and sales of Chinese EVs internationally.
- Rising Consumer Acceptance: As Chinese EVs become more prevalent globally, consumer recognition of their quality is increasing, which may prompt governments to further relax market access restrictions on Chinese EVs, accelerating industry consolidation and growth.
- Cautious Investment Outlook: Despite the promising prospects of the Chinese EV market, intense competition is squeezing profit margins, necessitating investors to carefully assess the investment value of Chinese EV companies, especially against the backdrop of market consolidation and policy changes.
See More
In-Depth Analysis of the Chinese EV Market
- Market Acceptance Rising: Canada's reduction of tariffs on Chinese EVs from 100% to 6.1% and plans to gradually increase import caps indicate a growing acceptance of Chinese vehicles in global markets, potentially opening up broader opportunities for manufacturers.
- Intensifying Competition: BYD's 19% profit decline in Q1 2026 highlights the fierce competition in the EV sector, as other manufacturers vie for market share, which may lead to increased pressure on profits in the coming years.
- Historical Parallels: Similar to the rise of Japanese cars in the U.S. market, Chinese EVs may disrupt Western automakers by offering higher quality products, prompting innovation and improvement that ultimately benefits consumers.
- Cautious Investment Outlook: Despite the promising prospects of the Chinese EV market, analysts remain cautious about investments, suggesting that fierce competition may hinder significant returns for investors, especially given government intervention in the industry.
See More
Investment Opportunity Analysis for Ferrari Stock
- Brand Scarcity: Ferrari's order book is filled until the end of 2027, ensuring a deep waiting list that enhances its pricing power and strengthens brand value and market competitiveness in the luxury sector.
- Outstanding Financial Performance: Over the past decade, Ferrari has averaged gross and operating margins of 50.8% and 24.7%, respectively, while net revenue has increased by 149%, demonstrating stable financial growth and profitability.
- Attractive Valuation: With a current P/E ratio of 35.2, below the historical average of 41.1 over the past ten years, the market's overreaction to its long-term growth guidance presents investors with a relatively cheap entry point.
- Market Environment Analysis: Despite cyclical demand and intense competition in the overall automotive industry, Ferrari's unique positioning as a luxury brand makes it attractive amid market volatility, warranting investor attention for potential opportunities.
See More
Ferrari: Investment Opportunity in a Luxury Brand
- Strong Pricing Power: Ferrari's gross and operating margins averaged 50.8% and 24.7% over the past decade, demonstrating its robust pricing power in the luxury market, which ensures sustained brand appeal and market position.
- Scarcity Strategy: The company's order book is filled until the end of 2027, creating a deep waiting list that not only maintains the brand's image but also allows certain models to start at seven-figure prices, making them rare collectibles.
- Market Opportunity: Currently, Ferrari's price-to-earnings ratio stands at 35.2, below the historical average of 41.1, with the stock down 31% from its peak, presenting investors with a chance to enter this unique company at a relatively cheap price.
- Financial Stability: Over the past decade, Ferrari's net revenue has increased by 149%, showcasing its exceptional financial performance in a highly competitive automotive industry, further solidifying its position as a luxury brand.
See More
Ferrari's 2025 AGM Resolutions Passed Successfully
- AGM Resolutions Passed: At Ferrari's Annual General Meeting held in Amsterdam, all proposed resolutions were approved, including the 2025 Annual Accounts and the Remuneration Report, reflecting shareholder confidence in the company's governance.
- Cash Dividend Approval: Shareholders approved a cash dividend of €3.615 per share, totaling approximately €640 million, which is set to be paid on May 5, 2026, thereby enhancing shareholder returns and boosting market confidence.
- Board Re-election and Authorization: The AGM re-elected all directors and authorized the Board to issue common shares and repurchase up to 10% of shares over the next 18 months, aimed at increasing capital flexibility and supporting shareholder value.
- Audit and Sustainability Assurance: Deloitte was reappointed as the independent auditor for the financial year 2026 and will also provide sustainability assurance, underscoring the company's commitment to transparency and sustainable practices.
See More
Ferrari's Strong Order Book Amid Stock Repricing
- Strong Order Demand: Despite a stock price decline due to market repricing, Ferrari's order book continues to fill up, suggesting robust demand through next year, indicating that the pullback is more about valuation than the health of the underlying business.
- Slower Revenue Growth: Ferrari has lowered its 2030 revenue growth target to 5% per year, a significant drop from the previous 12% to 17% rates, and reduced its electric vehicle sales target from 40% to 20%, raising market concerns about potential earnings growth slowdown.
- Unique Profitability Model: Ferrari maintains strong pricing power through engineered scarcity and high-margin personalization options, which accounted for about 20% of revenue in recent quarters, resulting in profit margins that most competitors cannot match.
- Healthy Financial Position: The company's industrial free cash flow rose approximately 50% to €1.5 billion last year, with a modest net debt position providing flexibility for electric vehicle development and capital needs, while EBITDA margins are expected to expand to at least 40% by 2030.
See More
Rapid Growth of Chinese Electric Vehicle Market
- Increased Competition: Chinese EV manufacturers like BYD and Geely have overtaken Tesla in global EV sales, demonstrating strong competitiveness of Chinese brands in the global market, which may pressure American automakers' market shares.
- Tariff Policy Changes: Canada has reduced tariffs on Chinese EVs from 100% to 6.1%, although import caps remain, indicating a gradual market opening that could enhance acceptance and sales of Chinese EVs internationally.
- Rising Consumer Acceptance: As Chinese EVs become more prevalent globally, consumer recognition of their quality is increasing, which may prompt governments to further relax market access restrictions on Chinese EVs, accelerating industry consolidation and growth.
- Cautious Investment Outlook: Despite the promising prospects of the Chinese EV market, intense competition is squeezing profit margins, necessitating investors to carefully assess the investment value of Chinese EV companies, especially against the backdrop of market consolidation and policy changes.
See More
In-Depth Analysis of the Chinese EV Market
- Market Acceptance Rising: Canada's reduction of tariffs on Chinese EVs from 100% to 6.1% and plans to gradually increase import caps indicate a growing acceptance of Chinese vehicles in global markets, potentially opening up broader opportunities for manufacturers.
- Intensifying Competition: BYD's 19% profit decline in Q1 2026 highlights the fierce competition in the EV sector, as other manufacturers vie for market share, which may lead to increased pressure on profits in the coming years.
- Historical Parallels: Similar to the rise of Japanese cars in the U.S. market, Chinese EVs may disrupt Western automakers by offering higher quality products, prompting innovation and improvement that ultimately benefits consumers.
- Cautious Investment Outlook: Despite the promising prospects of the Chinese EV market, analysts remain cautious about investments, suggesting that fierce competition may hinder significant returns for investors, especially given government intervention in the industry.
See More
Investment Opportunity Analysis for Ferrari Stock
- Brand Scarcity: Ferrari's order book is filled until the end of 2027, ensuring a deep waiting list that enhances its pricing power and strengthens brand value and market competitiveness in the luxury sector.
- Outstanding Financial Performance: Over the past decade, Ferrari has averaged gross and operating margins of 50.8% and 24.7%, respectively, while net revenue has increased by 149%, demonstrating stable financial growth and profitability.
- Attractive Valuation: With a current P/E ratio of 35.2, below the historical average of 41.1 over the past ten years, the market's overreaction to its long-term growth guidance presents investors with a relatively cheap entry point.
- Market Environment Analysis: Despite cyclical demand and intense competition in the overall automotive industry, Ferrari's unique positioning as a luxury brand makes it attractive amid market volatility, warranting investor attention for potential opportunities.
See More
Ferrari: Investment Opportunity in a Luxury Brand
- Strong Pricing Power: Ferrari's gross and operating margins averaged 50.8% and 24.7% over the past decade, demonstrating its robust pricing power in the luxury market, which ensures sustained brand appeal and market position.
- Scarcity Strategy: The company's order book is filled until the end of 2027, creating a deep waiting list that not only maintains the brand's image but also allows certain models to start at seven-figure prices, making them rare collectibles.
- Market Opportunity: Currently, Ferrari's price-to-earnings ratio stands at 35.2, below the historical average of 41.1, with the stock down 31% from its peak, presenting investors with a chance to enter this unique company at a relatively cheap price.
- Financial Stability: Over the past decade, Ferrari's net revenue has increased by 149%, showcasing its exceptional financial performance in a highly competitive automotive industry, further solidifying its position as a luxury brand.
See More
Ferrari's 2025 AGM Resolutions Passed Successfully
- AGM Resolutions Passed: At Ferrari's Annual General Meeting held in Amsterdam, all proposed resolutions were approved, including the 2025 Annual Accounts and the Remuneration Report, reflecting shareholder confidence in the company's governance.
- Cash Dividend Approval: Shareholders approved a cash dividend of €3.615 per share, totaling approximately €640 million, which is set to be paid on May 5, 2026, thereby enhancing shareholder returns and boosting market confidence.
- Board Re-election and Authorization: The AGM re-elected all directors and authorized the Board to issue common shares and repurchase up to 10% of shares over the next 18 months, aimed at increasing capital flexibility and supporting shareholder value.
- Audit and Sustainability Assurance: Deloitte was reappointed as the independent auditor for the financial year 2026 and will also provide sustainability assurance, underscoring the company's commitment to transparency and sustainable practices.
See More
