Intrinsic Value Ferrari N.V. (RACE.SW)

• Previous Close: CHF156.00
• Intrinsic Value: n/a
• Upside potential: n/a%

Stock Valuation Context

Business Model And Market Position

Ferrari N.V. is a globally recognized luxury performance sports car manufacturer, operating in the high-end automotive sector. The company's core revenue model revolves around the production and sale of exclusive vehicles, including sports, GT, and hyper cars, alongside limited-edition and one-off models. Ferrari also generates income through after-sales services, brand licensing, and theme parks, reinforcing its premium positioning. The brand's prestige is further amplified by its involvement in Formula 1 racing, which enhances its desirability and market differentiation. With a selective distribution network of 172 authorized dealers and 30 retail stores, Ferrari maintains tight control over its brand experience, ensuring exclusivity. The company's diversified revenue streams, including apparel, accessories, and financial services, provide stability beyond automotive sales. Ferrari's strong pricing power and limited production volumes underscore its status as a leader in the ultra-luxury automotive segment, appealing to affluent consumers and collectors worldwide.

Revenue Profitability And Efficiency

Ferrari reported revenue of CHF 6.68 billion for the period, with net income reaching CHF 1.52 billion, reflecting a robust net margin of approximately 22.8%. The company's operating cash flow stood at CHF 1.93 billion, demonstrating strong cash generation capabilities. Capital expenditures of CHF 482 million indicate disciplined reinvestment to support growth and innovation while maintaining profitability.

Earnings Power And Capital Efficiency

Ferrari's diluted EPS of CHF 8.46 highlights its earnings strength, supported by high-margin vehicle sales and brand monetization. The company's capital efficiency is evident in its ability to generate substantial cash flows relative to its asset base, with a focus on premium pricing and controlled production volumes driving returns.

Balance Sheet And Financial Health

Ferrari maintains a solid financial position, with cash and equivalents of CHF 1.74 billion and total debt of CHF 3.35 billion. The balance sheet reflects prudent leverage, supported by consistent profitability and strong liquidity. The company's financial health is further reinforced by its ability to fund operations and growth initiatives without excessive reliance on external financing.

Growth Trends And Dividend Policy

Ferrari has demonstrated steady growth, supported by strong demand for its luxury vehicles and brand extensions. The company's dividend policy, with a payout of CHF 2.37 per share, reflects its commitment to returning capital to shareholders while retaining sufficient funds for strategic investments. Limited production volumes and pricing power provide a stable foundation for future growth.

Valuation And Market Expectations

With a market capitalization of CHF 27.93 billion and a beta of 0.584, Ferrari is valued as a premium, low-volatility asset in the luxury automotive sector. Investors likely anticipate sustained demand for its exclusive products and brand-driven revenue streams, supported by its strong pricing power and global recognition.

Strategic Advantages And Outlook

Ferrari's strategic advantages include its iconic brand, racing heritage, and exclusivity-driven business model. The company is well-positioned to capitalize on the growing luxury market, with potential opportunities in electrification and digital engagement. Its focus on innovation, coupled with disciplined production, ensures long-term competitiveness in the high-performance automotive segment.

Sources

Company filings, investor presentations, Bloomberg