RACE
RACEFerrari designs, engineers, and produces luxury sports cars operating in the consumer discretionary sector.
The company is defined by its unparalleled brand prestige and racing heritage, creating exceptionally high-margin, exclusive vehicles.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy RACE Today?
Of course. Here is a professional analysis of RACE (Ferrari N.V.) based on the information provided.
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**Analysis of RACE (Ferrari N.V.)**
Overall Assessment: Ferrari presents a classic case of a high-quality company with a challenging stock price. The brand's strength is undeniable, translating into robust profitability and a pristine balance sheet with minimal debt. However, the stock's valuation has become extremely stretched, trading at sky-high multiples for revenue and earnings. While its low volatility is appealing, the shares have experienced a significant drawdown and are trading near 52-week lows, indicating negative momentum.
Fundamental vs. Technical View: Fundamentally, Ferrari is an exceptionally well-run business with strong pricing power and financial health. Technically, the stock is in a clear downtrend, having underperformed the market significantly. This divergence suggests the market is repricing the stock after a period of excessive optimism, focusing more on its high valuation than its operational excellence.
**Investment Recommendation**
Based on the current analysis, a HOLD recommendation is warranted for existing investors, while new investors should wait for a better entry point. The core business remains world-class, but the stock's premium valuation (e.g., P/S ratio of 41.5) leaves little room for error and makes it vulnerable to further downside if growth expectations are not met. The stock appears to be in a "show me" phase, where it needs to demonstrate that its earnings can grow into its lofty valuation. Therefore, patience is advised.
*Disclaimer: This is not investment advice. Please conduct your own research before making any investment decisions.*
RACE 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Based on a comprehensive analysis, here is a 12-month outlook for Ferrari (RACE):
The primary positive catalyst for Ferrari will be the successful execution of its product roadmap, including the launch of its first fully electric vehicle in late 2025, sustaining its exceptional pricing power and high-profit margins. The key risk remains its extreme valuation premium, which leaves the stock vulnerable to any earnings disappointment or a broader market shift away from high-priced growth stocks. Given the absence of a specific analyst target, a prudent 12-month target range would be contingent on the stock growing into its valuation, with a potential upside to the $380-$400 area if execution remains flawless, but with downside risk toward $320 if macroeconomic or company-specific headwinds emerge.
Wall Street Consensus
Most Wall Street analysts are optimistic about RACE's 12-month outlook, with consensus target around $353.39, indicating expected upside potential.
Bulls vs Bears: RACE Investment Factors
Overall, RACE has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Strong Brand Power: Rich racing legacy and design expertise underpin premium valuation.
- Ultra-Luxury Market Position: Rare dips in stock price present buying opportunities for investors.
- UBS Maintains Buy Rating: Analyst reaffirms positive outlook despite minor price target cut.
Bearish
- Stock Price Downturn: Share price has plunged over 25% from recent highs.
- HSBC Downgrade to Hold: Cites F80 model ramp-up offset by F1 R&D and FX headwinds.
- Limited Near-Term Catalysts: Significant positive drivers seen only well down the road.
RACE Technical Analysis
Overall Assessment: RACE has demonstrated notably weak performance over recent months, underperforming the broader market as evidenced by its significant negative returns.
Short-term Performance: The stock has declined 2.14% over the past month and 11.61% over the past three months, which is substantially worse than the market given its negative relative strength of -14.98%. This indicates consistent underperformance against the benchmark during this period.
Current Position: Trading at $360.09, RACE hovers just above its 52-week low of $356.93, positioning it near the bottom of its yearly trading range and pointing toward an oversold condition. While the low beta of 0.594 suggests lower volatility, the maximum drawdown of -30.44% confirms the stock has experienced significant downside pressure.
| Period | RACE Return | S&P 500 |
|---|---|---|
| 1m | -3.7% | +1.3% |
| 3m | -10.7% | +5.7% |
| 6m | -28.0% | +10.6% |
| 1y | -18.1% | +16.5% |
| ytd | -5.0% | +1.1% |
RACE Fundamental Analysis
Revenue & Profitability: RACE demonstrates robust profitability with a net margin of 21.6% for Q3 2025, although this represents a sequential decline from the 23.7% margin reported in Q2. Revenue remained stable at €1.77 billion quarter-over-quarter, while the gross profit ratio decreased slightly from 52.6% to 50.1%, indicating some pressure on production costs.
Financial Health: The company maintains a strong liquidity position with a current ratio of 2.30 and a conservative debt profile, evidenced by a low debt ratio of 30.3% and exceptional interest coverage of 47.1x. The solid cash ratio of 0.69 and healthy operating cash flow generation support financial stability.
Operational Efficiency: RACE's operational metrics show mixed efficiency with a respectable return on equity of 10.1%, but a relatively low asset turnover of 0.19 suggests potential underutilization of the asset base. The cash conversion cycle of 120 days is elevated, primarily driven by high days of inventory outstanding (110 days), indicating slower inventory movement.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Try Now & Get Tesla Stock RewardValuation Analysis: Is RACE Overvalued?
Based on the provided metrics, RACE appears significantly overvalued. The trailing PE of 34.4 is high for most sectors, but the forward PE of 48.1 and negative PEG ratio indicate deteriorating earnings growth expectations. Alarmingly high valuations are confirmed by the elevated PB ratio of 19.4, the extraordinary PS ratio of 41.5, and a staggering EV/EBITDA multiple of 112, which collectively suggest the stock price is disconnected from fundamental performance.
A peer comparison cannot be performed as specific industry average data is not available. Without these benchmarks for the automotive luxury/supercar sector, it is impossible to determine if RACE's premium multiples are typical for its niche or an outright outlier. This lack of comparative context significantly limits the depth of the valuation analysis and any conclusive relative assessment.
Investment Risk Disclosure
Volatility Risk: RACE exhibits notably low volatility risk, with a beta of 0.594 indicating it is significantly less volatile than the broader market. However, this low beta is paired with a substantial maximum drawdown of -30.44% over the past year, revealing that the stock is still capable of experiencing significant peak-to-trough declines during adverse market conditions.
Other Risks: The stock presents no immediate risk from short sellers, as the short interest is nonexistent. While this reflects strong investor conviction, the primary remaining consideration is liquidity; large-cap stocks like RACE typically feature high trading volumes, mitigating liquidity risk, though any shift in market sentiment could still impact execution prices.
FAQs
Neutral-to-bearish in the short term. While Ferrari boasts a strong brand, high profitability, and solid financial health, its extreme valuation multiples (forward P/E of 48, EV/EBITDA of 112) are concerning. Combined with recent price weakness and a lack of near-term catalysts, the stock appears priced for perfection. This stock is best suited for very patient, long-term investors who believe in the brand's enduring premium and can tolerate potential near-term stagnation.
Based on the provided data, RACE is significantly overvalued.
The valuation multiples are exceptionally high. A trailing P/E of 34.4 is elevated, but it is dwarfed by the forward P/E of 48.1 and a negative PEG ratio of -4.77, which signals collapsing growth expectations. The Price-to-Sales (PS) ratio of 41.5 and Price-to-Book (PB) ratio of 19.4 are extreme, indicating the stock price is factoring in near-perfect execution far into the future.
The primary reason for this premium valuation is the market’s anticipation of high growth, likely tied to the company's brand and future electric vehicle plans. However, this optimism appears disconnected from current fundamentals, as evidenced by declining margins and an asset turnover of just 0.19, suggesting the company is not efficiently generating sales from its asset base to justify such rich multiples.
Of course. Based on the provided information, here are the key risks of holding RACE, ordered by importance.
Key Risks of Holding RACE Stock
1. Significant Price Decline and Underperformance Risk: The stock is experiencing severe negative momentum, trading near its 52-week low after underperforming the market by nearly 15% over three months, indicating a potential loss of investor confidence and persistent selling pressure. 2. Operational Inefficiency and Inventory Risk: The company demonstrates a high cash conversion cycle of 120 days, primarily due to 110 days of inventory outstanding, signaling potential overstocking, slower-than-expected sales, and inefficiencies in working capital management that could pressure cash flow. 3. Profitability and Margin Compression Risk: Despite a healthy net margin, RACE is facing sequential declines in both its net and gross profit margins, indicating rising costs or an inability to fully pass them on to customers, which threatens future earnings growth. 4. Industry/Cyclical Risk Exacerbated by High Drawdown: While the stock has a low beta, its substantial maximum drawdown of -30.44% reveals a high susceptibility to deep losses during adverse market or industry-specific downturns, despite its overall lower volatility.
Of course. Here is a professional investment outlook for Ferrari (RACE) through 2026.
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**Ferrari (RACE) Investment Forecast: 2024 - 2026**
Based on a fundamental analysis of Ferrari's unparalleled brand strength, pricing power, and strategic growth initiatives, the forecast for the stock through 2026 is positive, contingent on successful execution of its electrification strategy.
1. Target Price Range: * Base Case (2026): $420 - $480. This assumes steady growth in personalization revenues, successful launches of new models (including the first EV), and maintained industry-leading margins. * Bull Case (2026): $500 - $580. This scenario requires Ferrari's EV strategy to be a resounding success, capturing significant market share in the ultra-luxury electric segment and expanding its brand appeal without diluting its exclusivity.
2. Key Growth Drivers: * Successful Electrification: The launch and market reception of Ferrari's first fully electric vehicle in late 2025 is the single most important catalyst, pivotal for attracting a new generation of clients. * Expansion of Branded Products & Services: Growth in high-margin areas like apparel, entertainment, and experiential offerings will diversify revenue streams beyond car sales. * Unmatched Pricing Power: Ferrari's ability to consistently increase prices and drive revenue through extensive personalization programs is a fundamental driver of its profitability.
3. Main Assumptions: * The global economy avoids a deep recession, preserving demand from its high-net-worth clientele. * Ferrari maintains its production exclusivity and brand aura amidst volume expansion. * The company successfully navigates the technological and brand risks associated with the transition to electrification.
4. Uncertainty & Risks: * This forecast is highly sensitive to Ferrari's execution on its EV roadmap; any delays or a lukewarm market reception pose significant downside risks. Furthermore, the stock's premium valuation makes it vulnerable to a broader market correction or a deterioration in macroeconomic conditions that could impact discretionary luxury spending.