Ferrari: Cheaper, Not Cheap
Ferrari is one of those brands everyone has heard of. The iconic red cars stand for strength, speed, and luxury. Ferrari stock has reflected that prestige as well, delivering an impressive performance, nearly a 10x return over the past decade.
Now, however, the stock is consolidating. It’s down more than 30% from its all-time high of €489 and currently trades around €320. The big question: is this a good time for investors to step into the driver’s seat?
From a technical perspective, the chart doesn’t really show a clear bottom yet. On top of that, valuation remains stretched despite the correction. The P/E ratio is still above 50, expensive even for a high-quality company like Ferrari.
Operationally, Ferrari has continued to deliver positive revenue and EPS growth over recent quarters, but the pace has clearly slowed. Growth has come down from high-teens and double-digit rates to more modest mid-single digits. Management’s outlook is also cautious, with lower shipment volumes expected and ongoing uncertainty around the cost and long-term success of its EV strategy.
To sum it up: yes, the stock is cheaper than before but it’s far from cheap. At current levels, I wouldn’t be a buyer, as the risks don’t seem fully reflected in the price yet. What do you guys think?
