| Snowflake Score | |
|---|---|
| Valuation | 0/6 |
| Future Growth | 3/6 |
| Past Performance | 2/6 |
| Financial Health | 4/6 |
| Dividends | 0/6 |
RACE Stock Overview
Ferrari N.V., through its subsidiaries, designs, engineers, produces, and sells luxury performance sports cars.
Ferrari N.V. Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$214.66 |
| 52 Week High | US$278.78 |
| 52 Week Low | US$167.45 |
| Beta | 0.95 |
| 1 Month Change | 10.95% |
| 3 Month Change | 11.59% |
| 1 Year Change | -4.96% |
| 3 Year Change | 37.44% |
| 5 Year Change | 90.22% |
| Change since IPO | 290.29% |
Recent News & Updates
What Is Ferrari N.V.'s (NYSE:RACE) Share Price Doing?
Today we're going to take a look at the well-established Ferrari N.V. ( NYSE:RACE ). The company's stock saw a...
Ferrari Non-GAAP EPS of €1.36 beats by €0.16, revenue of €1.29B beats by €70M
Ferrari press release (NYSE:RACE): Q2 Non-GAAP EPS of €1.36 beats by €0.16. Revenue of €1.29B (+24.0% Y/Y) beats by €70M. Total shipments of 3,455 units, up 28.7% versus Q2 2021. “Ferrari continues a phase of strong growth, with quarterly record results in terms of revenues, EBITDA and EBIT. The quality of the first six months and the robustness of our business allows us to revise upward the 2022 guidance on all metrics. Also the net order intake reached a new record level in the quarter” – commented Benedetto Vigna, Chief Executive Officer of Ferrari. “The last quarter was also notable for the unique memories generated by our 75th anniversary celebrations and the Cavalcades, which raised the experiences we offer clients for sharing the passion and spirit of Ferrari to new levels as we continue to push the boundaries.”
These 4 Measures Indicate That Ferrari (NYSE:RACE) Is Using Debt Reasonably Well
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it might be obvious that you need to...
Ferrari: Stock Is As Expensive As The Car
Ferrari (RACE) is trading very expensive at a 2023 P/E > x30 and EV/Revenue ~x7. Even for a luxury company, this valuation premium is not justified, in my opinion. LVMH, for example, is trading at a P/E of about x20. I view RACE stock as highly vulnerable to multiple contractions. This may be an add-on on top of the EPS slowdown. Personally, I value RACE at $125.80/share and see more than a 35% downside. Thesis Ferrari (RACE) is trading very expensive at a 2023 P/E > x30 and EV/Revenue x7. Even for a luxury company, this valuation premium is not justified, in my opinion. LVMH, for example is trading at a P/E of about x20. And most car companies, even premium automaker trade at a P/E significant below x10. Heading into a recession, I believe Ferrari is exposed not only to a significant EPS slowdown, but also to a multiple contraction. Ferrari stock has outperformed the market in the past 5 years. But this outperformance may be connected to a booming economy, as Ferrari's business is sensitive to wealth generation. Respectively, In a recessionary environment RACE stock could potentially fall much more than the broad market. Seeking Alpha The world's leading luxury car OEM Ferrari is arguably the world's most popular sports car OEM. The company produces as little as 11.15K cars a year (2021 record) with price-tags starting from about $300.000. Accordingly, Ferrari sells to the world's wealthiest consumers and demand generally exceeds the company's production capacity and/or willingness. Geographically, Ferrari operates worldwide: the EMEA is Ferrari's most important market accounting for approximately 45% of sales, followed by the Americas with about 35%, China with 10% and APAC excluding China with slightly more than 10%. Most notably, since 1947 Ferrari cars have been produced exclusively in Maranello, Italy. Arguably Overvalued Demand for Ferrari cars has exploded significantly in recent years, as low cost of capital and asset price inflation - including the crypto boom - has inflated global wealth and crowned a young generation of millionaires. In addition, the urge for self-advertisement on social media certainly helped fuel demand for high-prestige cars. That said, 2021 was a record year for Ferrari: The company generated revenues of about $5.1 billion (up about 23.4% as compared to 2021) and EBITDA of $1.8 billion (up 35.7% respectively). Q1 2022 did not indicate a slowdown as Ferrari achieved $1.33 billion of revenues and $471 million of EBITDA. Moreover, guidance remained very bullish as well, as Ferrari indicated that order-backlog supports demand well into 2023. However, despite-or because of - the bullish fundamentals, Ferrari stock is trading expensive. At > x30 P/E the market is certainly pricing an acceleration of Ferrari's business expansion. This, however, seems farfetched, in my opinion. Most drivers for Ferrari's bullish upswing are softening: asset prices deflate, capital costs rise and the crypto economy slows. Moreover, the market believes that Ferrari's business is very resilient going into a recession. But there are good reasons to disagree. Most notably, during the financial crisis, luxury car sales contracted by about 35%. That said, Ferrari is trading at a significant premium to peers - no matter if you define the benchmark as the automotive industry or the luxury segment. For reference, Ferrari's P/E is about 50% more expensive than LVMH and > 500% more expensive than Mercedes Benz. Thus, I view RACE stock as highly vulnerable to a multiple contraction. This may be add on top of the EPS slowdown. Seeking Alpha Residual Earnings Valuation Let us now look at Ferrari's valuation in more detail. I have constructed a Residual Earnings framework based on the analyst consensus forecast for EPS 'till 2025, a WACC of 8% and a TV growth rate equal to nominal GDP growth (3%). In my opinion, the long-term growth assumption equal to GDP growth might definitely be an underestimation, in my opinion, but I prefer to be conservative. If investors might want to consider a different scenario, I have also enclosed a sensitivity analysis based on varying WACC and TV growth combination. For reference, red cells imply an overvaluation, while green cells imply an undervaluation as compared to Ferrari's current valuation. Based on the above assumptions, my valuation estimates a fair share price of $125.80/share, implying a more than 35% downside potential based on accounting fundamentals.
Ferrari to commence a €150M first tranche of the new multi-year share buyback program of ~€2B
Ferrari N.V. (NYSE:RACE) intends to commence a €150M share buyback program, as the initial tranche of the new multi-year share buyback program of approximately €2B expected to be executed by 2026. The first tranche will start on July 1, 2022 and will end no later than November 30, 2022. It will be funded through the company’s available cash. Repurchased shares may be used to meet the obligations arising from the company’s equity incentive plan. An amount equivalent to €120M to be executed on the EXM market through a primary financial institution and €30M to be executed on the NYSE. The company currently holds No. 11,065,110 common shares in treasury. The first tranche replaces any previous common shares buyback program. Also read: Ferrari is taking the slow lane to an electric future even as it plans for its first fully electric Ferrari in 2025 - Reuters. Stock down ~29% on YTD basis.
Shareholder Returns
| RACE | US Auto | US Market | |
|---|---|---|---|
| 7D | 0.5% | 5.2% | 3.6% |
| 1Y | -5.0% | 16.8% | -9.6% |
Return vs Industry: RACE underperformed the US Auto industry which returned 9.8% over the past year.
Return vs Market: RACE exceeded the US Market which returned -10.2% over the past year.
Price Volatility
| RACE volatility | |
|---|---|
| RACE Average Weekly Movement | 5.2% |
| Auto Industry Average Movement | 11.8% |
| Market Average Movement | 7.7% |
| 10% most volatile stocks in US Market | 16.9% |
| 10% least volatile stocks in US Market | 3.2% |
Stable Share Price: RACE is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: RACE's weekly volatility (5%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1947 | 4,625 | Benedetto Vigna | https://www.ferrari.com |
Ferrari N.V., through its subsidiaries, designs, engineers, produces, and sells luxury performance sports cars. The company offers sports, GT, and special series cars; limited edition hyper cars; one-off and track cars; and Icona cars. It also provides racing cars, and spare parts and engines, as well as after sales, repair, maintenance, and restoration services for cars.
Ferrari N.V. Fundamentals Summary
| RACE fundamental statistics | |
|---|---|
| Market Cap | €38.52b |
| Earnings (TTM) | €907.02m |
| Revenue (TTM) | €4.70b |
42.5x
P/E Ratio8.2x
P/S RatioIs RACE overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| RACE income statement (TTM) | |
|---|---|
| Revenue | €4.70b |
| Cost of Revenue | €2.37b |
| Gross Profit | €2.34b |
| Other Expenses | €1.43b |
| Earnings | €907.02m |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Nov 02, 2022
| Earnings per share (EPS) | 4.96 |
| Gross Margin | 49.69% |
| Net Profit Margin | 19.29% |
| Debt/Equity Ratio | 119.4% |
How did RACE perform over the long term?
See historical performance and comparison