I am trying to wrap my head around Ferrari stock but I don’t get it. My issue is that it’s an 85 billion euro company with only 5,000 employees and has an nvidia-level earnings multiple. It seems to be growing at a very nice pace but that pace doesn’t seem high enough to justify the multiple. It has a very nice product but 100 billion dollar market cap for a company that sells under 10k cars in a year sounds like way too much.

    I’ve heard some very respected investors talk highly about it. Is there some expectation for things to get much better? Maybe they’ll sell more cars, buy a business, raise prices, cut costs? I don’t know much about this company and after very little research I can confidently say that I don’t understand it at all. Anybody have any insight as to why this could be a good investment?

    Help me understand Ferrari as an investment
    byu/stonkbuffet inwallstreetbets



    Posted by stonkbuffet

    25 Comments

    1. The whole point of ferrari is not to sell as many cars as they can. Their goal is to artificially limit supply and keep their very high margins. They have a very strong brand and will always sell no matter what, recession or not, people who can afford a ferrari will buy one.

      So when you buy Ferrari you buy a brand not a carmaker. They are like a luxury goods company and license their name so there are alternate oncome streams

      But at these valuations it is likely not a good investment in my opinion.

    2. Bloodinthe_sheets on

      Very good margins on Ferrari, unlike any other auto. Cult like following helps too.

    3. BigBritches619 on

      It’s an amazing company they only offer a select amount of Ferrari’s a year and who buys them? Rich people. They always have money and they always want a Ferrari bc it is a fuckin Ferrari! Quality Italian supercar. In terms of a market downturn Ferrari will still thrive due to rich people always having a demand to buy them whenever they want regardless of market situations. I never bought into it because it always traded at such a high p/e but i regret it i could have bought it back when it was $180. It’s been a monster of a stock since it went public in 2015.

    4. Best car manufacturer stock by fundamentals

      Best margins, Best returns, proper payout ratio

      Brand power

      700% since it was listed on the NYSE

    5. Willing_Turnover5568 on

      I wanted to short it because it’s way too expensive but went for an even more expensive car maker in the end.

    6. Active_Drawing_3362 on

      It’s completely immune from a recession. Of how many companies can you say the same?

    7. So I have been looking at buying a super car because I can… I was shocked to learn not only do Ferrari’s have the stupid buying rules vut most your super cars also are rated to last about 35k miles… that to me is a wtf…I mean I didn’t expect 150k but 35k…that’s just insulting

    8. It’s a predictable company, and people own the stock just to say they own a price of Ferrari

    9. I’ve owned $race since ipo. It’s done very well for me. I love the brand and probably will never sell. I also love f1.

    10. Old-Tiger-4971 on

      Think 80% of it is like the guys that own a share of the GB Packers.

      On auto stocks, until the Chinese EV thing gets sorted out, I’d be careful.

    11. Ferrari sells emotion.
      One of my lifelong goals is unironically to buy and drive a Ferrari for at least a year. And that’s despite knowing that they are a clown fiesta in F1, their CEO doesn’t speak English and that the internet is full of forums with people telling you it’s the best investment of their life’s despite their car breaking down every fucking 5000 kilometers.
      Sigh. Guess I belong here…

    12. DonutsOnTheWall on

      It can be an investment. If you have money as water, why not. Even if it’s not the best investment sometimes, it’s still fun to collect I imagine, and a nice topic, and you can also show them to your guests and impress them.

    13. m1ndfulpenguin on

      Let’s just say the stock is an unironic way for me to wear the company’s swag without having to own one of its cars.

    14. Ferrari’s net income is something like $1.5Bil, they don’t make that money selling cars.

      Fun factoids, Ferrari has an $80’ishBillion market cap, GM has $50Bil market cap.

      As an F1 fan I wouldn’t bet $100 on Ferrari winning the next race in Austin, but I’d go full regarded on their stock longterm.

    15. istockusername on

      A common misconception with high valuation is that people automatically think the stock has to the grow revenue fast to match it.

      Having a reliable track record os just as valuable. Same can be seen with Costco.

      For Ferrari, they are not planning to sell more cars but since there is always more demand than what they produce/sell you can assume that their revenue is quite reliable. On top of that people can only buy a Ferrari after they already own one that means you are also dealing with high net individuals as compared to many other car manufacturer stocks which are hit hard in economic downturns.

    16. Because of the target audience. If you can afford a Ferrari, you’re not concerned about recession.

      Since Ferrari artificially limit the supply, they hold value used.

      So, target rich people who won’t be affected by economic downturn and let them use their new toy as an investment.

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