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RACE Stock Study (6-15-26)

Posted by on July 23, 2026 at 07:28 | Last modified: June 14, 2026 17:59

Despite a poor showing at this year’s 24 Hours of Le Mans, I recently did a stock study on Ferrari N.V. (RACE, $354.91).

M* writes:

     > Ferrari designs, engineers, and manufactures some of the world’s
     > most expensive luxury cars. With supply carefully controlled to
     > be below demand and a brand steeped in decades of motor racing
     > history, a Ferrari is viewed as a status symbol. In 2025, the
     > company sold 13,640 vehicles at an average price over EUR 520,000
     > with more than 80% of its vehicles being sold to existing Ferrari
     > clients. Eighty-four percent of revenue is generated from the
     > sale of cars and spare parts and 10% from sponsorship, commercial,
     > and brand activities including racing and lifestyle activities.
     > In 2025, the Europe, Middle East, and Africa region accounted for
     > 49% of revenue, the Americas was 32%, mainland China, Hong
     > Kong, and Taiwan was 7%, and the rest of Asia was 12%.

Over the past 10 years, this medium-size company has grown sales and earnings 9.8% and 15.5% per year, respectively. Lines are mostly up, straight, and parallel except for YOY EPS decline in ’19 and sales+EPS decline in ’20. Ten-year EPS R^2 is 0.89 and Value Line (VL) gives an Earnings Predictability score of 80. Shares outstanding decrease 19.8% (2.4%/year).

Over the past 10 years, PTPM leads peer and industry averages while increasing from 18.3% to 28.9% (’25) with a last-5-year mean of 26.3%. ROE leads peer and industry averages despite falling from 237% [sic] to 40.4% (’25) with a last-5-year mean of 42.1% (shareholder equity consistently positive with an eye-popping 30.8% CAGR). Debt-to-Capital is less than industry averages but greater than peers while falling from 85.0% to 42.5% (’25) with a last-5-year mean of 48.5%.

Quick ratio is 2.1 and interest coverage 55 per M* who assigns “Wide” Economic Moat and gives an “Exemplary” rating for Capital Allocation. VL gives an A grade for Financial Strength.

With regard to sales growth:

My 4.0% per year forecast is below the range.

With regard to EPS growth:

My 6.0% forecast is below the long-term-estimate range (mean of seven: 8.7%). Initial value is ’25 EPS of $10.10/share rather than 2026 Q1 EPS of $10.41 (TTM).

My Forecast High P/E is 40.0. Over the past decade, high P/E increases from 25.2 to 51.4 (’25) with last-5-year mean of 51.8 and a last-5-year-mean average P/E of 42.5. I am in lower half of the range [’16, ’18 (30.7), and ’17 (37.8) are less].

My Forecast Low P/E is 26.0. Over the past decade, low P/E increases from 13.6 to 35.3 (’25) with a last-5-year mean of 33.2. I am forecasting the lowest since ’19 (23.3).

My Low Stock Price Forecast (LSPF) of $262.60 is default based on initial value from above: 26.0% less than previous close and 16.0% less than the 52-week low.

Over the last decade, Payout Ratio (PR) increases from 21.8% to 33.3% (’25) with a last-5-year mean of 26.9%. I am forecasting below the range at 17.0%.

These inputs land RACE in the HOLD zone with a U/D ratio of 2.0. Total Annualized Return (TAR) is 9.2%.

PAR (using Forecast Average—not High—P/E) of 5.2% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only 21 studies done in the past 90 days (six outliers including my own excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 8.5%, 7.8%, 42.5, 31.4, and 26.7%, respectively. I am lower across the board. VL projects a future average P/E of 45.0 that is greater than MS (37.0) and greater than mine (33.0).

MS high / low EPS are $14.98 / $10.28 versus my $13.52 / $10.10 (per share). My high EPS is less due to a lower growth rate. VL (M*) high EPS of $14.30 ($15.22—converted from €) is in the middle (greater than both).

MS LSPF of $287.70 implies a Forecast Low P/E of 28.0: less than the above-stated 31.4. MS LSPF is 10.9% less than the default $10.28/share * 31.4 = $322.79 resulting in more conservative zoning. MS LSPF is 9.6% greater than mine, though.

MOS is robust in the study because my inputs are below or in lower portion of historical/analyst/MS averages/ranges. MS TAR exceeding mine by 5.4% per year supports the assessment along with my lower LSPF.

With regard to valuation, PEG is 3.4 and 5.4 per Zacks and my projected P/E: overvalued (M* has only 1.6). Relative Value [(current P/E) / 5-year-mean average P/E] is low at 0.8. “Quick and Dirty” free cash flow method has stock undervalued by 26% (neither dividend nor debt assessments included) while M* reports the stock at a 17% discount.

Heads-up as this company appears to be maturing and possibly not continuing into the future as a “high-quality growth stock.”

Per U/D, RACE would be a BUY under $332/share. Given a forecast high price ~$541, BetterInvesting® TAR criterion would be met [540.8 / ((14.47 / 100 ) +1 ) ^ 5] ~ $275.

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