Ferrari (BIT:RACE): Exploring Valuation After Recent Share Price Decline

Ferrari (BIT:RACE) shares have slipped over the past week, declining around 6% following a period of relative stability. Investors appear to be weighing recent performance as the company navigates changing market conditions and muted sentiment across European equities.

See our latest analysis for Ferrari.

Ferrari’s 1-year total shareholder return stands at -15.1%, highlighting how recent share price weakness is extending a broader pullback. Momentum has clearly faded since earlier highs, with the stock drifting lower amid cautious sentiment and shifting sector dynamics.

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With shares now trading near a 17% discount to analyst price targets, investors are left wondering whether Ferrari is primed for a rebound or if the market has already accounted for its future growth prospects.

Most Popular Narrative: 15% Undervalued

With Ferrari's fair value set by the most-followed narrative around €403, the recent last close of €342 places its shares well below this consensus mark. The market’s discount is drawing new attention to the company’s future potential as defined by key growth levers and profitability outlook.

Expanding the model lineup (e.g., Amalfi, 296 Speciale, increased customization/personalization offerings) is successfully attracting new ultra-high-net-worth clients globally, especially in underpenetrated regions like China, supporting future revenue growth, ASP improvements, and long order backlog visibility.

Read the complete narrative.

Want to know what’s pushing Ferrari’s value higher? The narrative turns on surging global demand, ambitious revenue projections, and a bold profit margin outlook. Curious which financial forecasts and strategic bets set this fair value? The answers may surprise you. See what makes this valuation tick.

Result: Fair Value of €403 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slower adoption of electric models or changing luxury market trends could challenge Ferrari’s growth story and put pressure on future valuations.

Find out about the key risks to this Ferrari narrative.

Another View: Multiples Paint a Pricier Picture

While narrative-led fair value suggests Ferrari is undervalued, a look at price-to-earnings multiples tells a different story. Ferrari’s ratio of 37.9x is more than double the global auto industry’s 17.7x average and well above the peer average of 15.7x. In comparison to a fair ratio of 19.9x, this premium signals the market is placing a hefty value on Ferrari’s brand and growth story, but it also means investors face greater valuation risk if expectations fall short. Could this rich valuation be justified, or might reality catch up?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Ferrari Narrative

If you want to dig into the numbers or believe your perspective tells a different story, try crafting your own narrative in just minutes with Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Ferrari.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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