Ferrari (NYSE:RACE) shares have moved slightly higher recently, catching the interest of investors looking at the luxury automaker's current performance. The stock has seen some ups and downs over the past month, prompting fresh evaluation about its value.
Ferrari’s recent upswing comes after a turbulent month. Taking a step back reveals a stock with long-term horsepower, as the 3-year total shareholder return stands at a remarkable 106%, even though the recent 1-year total shareholder return is down 7.5%. This momentum shift suggests investors are weighing growth potential against evolving risks, keeping Ferrari firmly in the spotlight for those watching the luxury auto space.
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With earnings climbing but recent returns trailing broader markets, the key question for investors is whether Ferrari is trading below its true value, or if the current price already reflects all future growth potential.
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Most Popular Narrative: 13.3% Undervalued
Ferrari's most followed narrative places fair value substantially above the last close price of $406.67. This highlights ambitious growth dynamics and fuels ongoing debate about how high the stock can go.
Ferrari's expansion of infrastructure and product offerings, including the new e-building and paint shop for enhanced personalization, is expected to increase production flexibility and support revenue growth as well as improved net margins through operational efficiencies.
Curious about what powers Ferrari’s high sticker price? The narrative centers on bold forecasts for profit margins and relentless innovation. Want to see exactly how these projections add up to a double-digit upside? Click through and dissect the financial engine behind this valuation target.
However, potential over-saturation from multiple new model launches and ongoing supply chain challenges could undermine Ferrari’s ability to sustain high margins and exclusivity.
Looking through another valuation lens raises fresh questions. Ferrari trades at a price-to-earnings ratio of 39.3x, sharply higher than its industry peers at 15.9x and the fair ratio of 14.3x. This signals the market is pricing in strong performance, but is it too much too soon?
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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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