Ferrari (BIT:RACE) is back in focus after a one off Ferrari Luce electric model sold for $40 million at a Monterey Car Week charity auction, the highest price ever paid for a new car at auction.
See our latest analysis for Ferrari.
The record Ferrari Luce sale comes as Ferrari’s share price has gained 10.89% over the past month and 21.56% over 90 days, while the 1 year total shareholder return has declined 8.98% and the 5 year total shareholder return has risen 104.62%. This indicates that recent momentum has picked up following a weaker period for long term holders.
If this kind of premium pricing power catches your attention, it may be worth widening your search and checking a screener of 110 top founder-led companies for more ideas beyond the auto sector.
Ferrari has rewarded long term holders over five years, and the recent rebound plus the record Luce sale puts fresh optimism back in the stock. The key issue now is whether most of the upside is already priced in.
Most Popular Narrative: 4.5% Undervalued
Ferrari's most followed narrative points to a fair value of about €380 per share compared with the last close at €362.50, which implies a modest valuation gap that depends heavily on future execution and capital allocation.
The ramp-up of high-margin, recurring revenue streams from brand sponsorships, lifestyle, and personalization, fueled by lifestyle activities, racing events, and growing global brand desirability, will further enhance margin accretion, drive resilient long-term earnings, and reduce reliance on car sales volume alone. Ongoing investments in innovation (for example, electrification, new manufacturing/paint facilities, and cross-sector technology transfers such as the Hypersail project) both future-proof the business and leverage secular trends towards luxury experiential goods, likely resulting in higher capital efficiency and supporting sustainable earnings growth over the next cycle.
Want to see what underpins that fair value for Ferrari? The narrative leans on steady earnings growth, firm margins, and a premium future earnings multiple. Curious which assumptions really carry the model and how much buybacks and new models factor in? The full story joins those moving parts into one price tag.
Result: Fair Value of €380 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, you also need to weigh risks such as slower than expected electrification progress and any shift in luxury spending that weakens Ferrari order visibility.
Find out about the key risks to this Ferrari narrative.
Another View On Ferrari’s Valuation
The fair value narrative for Ferrari points to a small 4.5% undervaluation around €380 per share. The P/E ratio tells a tougher story. At 42.6x earnings versus a fair ratio of 22x, the stock trades at a very rich premium that raises clear valuation risk if sentiment cools.
That premium is also steep compared with the global auto industry on 13.5x and Ferrari’s peer average on 27.3x. The question for you is whether Ferrari’s brand strength and growth outlook fully justify that gap, or whether it simply leaves less room for error.See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With sentiment on Ferrari finely balanced, you may want to weigh both sides of the story yourself and move quickly while the data is fresh. To see the full picture of risks and rewards around this stock, start with these 2 key rewards and 1 important warning sign.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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