Intrinsic Value Ferrari N.V. (2FE.DE)

• Previous Close: €280.70
• Intrinsic Value: €228.28
• Upside potential: -19%

Stock Valuation Context

Business Model And Market Position

Ferrari N.V. is a globally recognized luxury automotive manufacturer specializing in high-performance sports cars, GT vehicles, and limited-edition hypercars. The company operates in the premium segment of the auto industry, leveraging its iconic brand to command premium pricing and exclusivity. Beyond vehicle production, Ferrari diversifies revenue through licensing agreements, theme parks, apparel, and after-sales services, reinforcing its status as a lifestyle brand. Its market position is reinforced by a meticulously controlled supply chain, ensuring scarcity and maintaining high resale values. Ferrari’s direct-to-consumer approach, including owned and franchised retail stores, enhances brand loyalty and customer engagement. The company’s participation in Formula 1 racing further amplifies its prestige, serving as a technological showcase and marketing platform. With a global network of authorized dealers and a strong digital presence, Ferrari maintains a dominant position in the ultra-luxury automotive sector, appealing to high-net-worth individuals and collectors.

Revenue Profitability And Efficiency

Ferrari reported revenue of €6.68 billion in the latest fiscal year, with net income reaching €1.52 billion, reflecting a robust 22.8% net margin. The company’s operating cash flow stood at €1.93 billion, supported by disciplined cost management and high-margin product sales. Capital expenditures of €482 million indicate ongoing investments in innovation and production capacity, aligning with its growth strategy.

Earnings Power And Capital Efficiency

Ferrari’s diluted EPS of €8.46 underscores its strong earnings power, driven by premium pricing and operational efficiency. The company’s capital-light licensing and brand extension activities contribute to high returns on invested capital, while its core automotive business benefits from low-volume, high-margin production. This dual approach ensures sustained profitability and capital efficiency.

Balance Sheet And Financial Health

Ferrari maintains a solid balance sheet with €1.74 billion in cash and equivalents, providing liquidity for strategic initiatives. Total debt of €3.35 billion is manageable given its strong cash flow generation. The company’s financial health is further supported by its ability to fund growth while maintaining shareholder returns, including a dividend payout of €2.986 per share.

Growth Trends And Dividend Policy

Ferrari’s growth is driven by new model launches, geographic expansion, and brand extensions. The company has consistently increased dividends, reflecting confidence in its cash flow stability. Limited production volumes and high demand ensure pricing power, while investments in electrification and hybrid technologies position it for future regulatory and consumer trends.

Valuation And Market Expectations

With a market capitalization of €75.1 billion and a beta of 0.687, Ferrari is valued as a premium, low-volatility asset. Investors price in sustained brand strength and margin resilience, supported by its unique market position. The stock’s valuation reflects expectations of steady growth and high barriers to entry in the luxury automotive segment.

Strategic Advantages And Outlook

Ferrari’s strategic advantages include its unrivaled brand equity, exclusivity-driven business model, and technological leadership in high-performance vehicles. The company is well-positioned to navigate industry shifts toward electrification while maintaining its luxury appeal. Long-term growth prospects remain strong, supported by global demand for luxury goods and strategic investments in innovation and brand expansion.

Sources

Company filings, investor presentations, and market data.