If the last five years had an automobile stock race, Tesla might have been a crowd favorite, but guess who’s been burning rubber and leaving everyone else in the dust? Ferrari.
Forget Tesla, wave goodbye to Ford and GM, and put those thoughts of BMW or Volkswagen in the rearview mirror. In the last three years alone, Ferrari has not just overtaken but nearly tripled Tesla’s gains, gaining nearly 70% compared to Tesla’s 26%, showcasing that it’s not just a car; it’s a financial force to be reckoned with.
Graph: Price change – 5Y: Ferrari has trounced much of its competition over the past five years
With its prancing horse logo and iconic cars, Ferrari stands in a league of its own. Sure, there’s a distant cousin named Lamborghini, but let’s face it, when it comes to luxury and speed, Ferrari isn’t just a car; it’s an icon, a symbol of luxury, speed, and a lifestyle most can only dream of. Ferrari’s exclusivity is its horsepower, unlike its mainstream counterparts drowning in millions of sales. High-net-worth individuals worldwide are craving a piece of the Ferrari magic, and with a business model that follows the Enzo Ferrari mantra – “always sell one car less than the market demand” – they’re keeping the desire burning.
But what sets Ferrari apart isn’t just the sleek designs or the powerful engines; it’s the business model focused on exclusivity and restrictive volumes. In 2022, each Ferrari sold brought in a jaw-dropping 385,000 euros. When COVID-19 hit the auto industry hard, other automakers were weathering economic storms, Ferrari maintained stability, proving that targeting the ultra-rich is not just a smart move; Ferrari merely tapped on the brakes, with shipments and revenue seeing a minor dip compared to the significant declines faced by mainstream automakers like Ford.
Q3-23 highlights are like music to investors’ ears, with consolidated revenues up 23.5%, shipments increasing by 8.5%, and the Purosangue, Ferrari’s first SUV, has been a game-changer, propelling revenues and margins to new heights. It’s not just a car; it’s a statement. And speaking of statements, Ferrari is gearing up for nearly 18% growth for the entire year. Ferrari’s inclusion in the Euro Stoxx 50 Index is a testament to its growth, making it one of the 50 largest companies in Europe.
Ferrari’s move toward electric vehicles is not just whispering; it’s roaring. Hybrids are already taking center stage; in late June it unveiled two new hybrids, the SF90 XX Stradale and the SF90 XX Spider, which have already sold out faster than a Ferrari on an open track. The future looks electric, and Ferrari is not just joining the race; it’s leading it. Ferrari’s “e-building,” which will be a production facility focused on EV models and hybrid components, is on track to be completed by mid ‘24.
This under-the-radar stock is no longer a secret, thanks to Ferrari’s resilience, market-crushing returns, and a dividend payout that’s practically doing donuts. But, as any racer will tell you, the track ahead is always full of twists and turns.
As the engine roars and investors contemplate the allure of Ferrari, there’s one thing we can be sure of – the possibility of higher volatility is growing. Yet, amidst the twists and turns, the stock remains attractively valued for long-term investors. CEO Benedetto Vigna is steering this prancing horse with finesse, proving that when it comes to leading one of the most prestigious businesses in the world, Ferrari doesn’t just break records; it sets them.