Ferrari NV
The world's most exclusive automaker — €6.7B in revenue from just 13,752 cars, 38% EBITDA margins, and a brand moat built on 77 years of racing heritage, engineered scarcity, and a waiting list that stretches years into the future.
Business Overview
What does Ferrari do, and why can nobody replicate it?
Ferrari is not a car company. It is a luxury brand that happens to make cars. Founded in 1947 by Enzo Ferrari in Maranello, Italy, Ferrari has spent 77 years perfecting the art of engineered scarcity — deliberately producing fewer cars than the market demands, creating waiting lists that stretch years into the future, and building a customer hierarchy where access to the most exclusive models must be earned through loyalty and prior ownership.
Under CEO Benedetto Vigna (since 2021), Ferrari has expanded its strategy beyond pure automotive manufacturing into a broader luxury lifestyle ecosystem. The brand licensing, sponsorship (primarily Formula 1), and personalisation programmes are growing faster than the cars themselves. Crucially, Ferrari controls every lever of its business: production volume, pricing, customer selection, and secondary market values.
What makes Ferrari truly unique is that it achieves double-digit revenue growth with virtually flat unit volumes. In 2024, deliveries grew just 0.7%, yet revenue grew 11.8% and net income surged 21.3%. This is pure pricing power and product mix enrichment — customers are paying more for richer specifications, bespoke personalisation (the Tailor Made programme), and higher-priced models like the Purosangue SUV and 12Cilindri grand tourer.
Ferrari is also navigating the electrification transition with characteristic discipline. Hybrids already account for 51% of shipments, and the first fully electric Ferrari — codenamed "Ferrari Luce" — is expected in 2026. The 2030 target mix is 40% ICE, 40% hybrid, and 20% fully electric.
Cars & Spare Parts
86% of revenue. Ultra-luxury sports cars (SF90, 296 GTS, Roma, 12Cilindri, Purosangue) plus personalisation, spare parts, and pre-owned programme. +11.9% YoY growth.
Sponsorship & Brand
10% of revenue. Formula 1 sponsorship, brand licensing, merchandise, lifestyle events, and commercial partnerships. The fastest-growing segment at +22.1% YoY with 70%+ margins.
Engines & Other
4% of revenue. Engine supply to Maserati (declining as Maserati transitions in-house) and other ancillary revenue streams. This segment is expected to shrink over time.
Financial Fundamentals
Three tests every quality business must pass
Moat Analysis
Five dimensions that determine competitive durability
Brand Loyalty & Pricing Power
9/10Perhaps the strongest brand moat in the world. Ferrari achieves 11.8% revenue growth on just 0.7% unit growth — pure pricing power. Multi-year waiting lists, a customer hierarchy that gates access to limited models, and personalisation programmes that command enormous premiums. The Prancing Horse badge is priceless.
High Barriers to Entry
9/1077 years of racing heritage cannot be replicated. The Formula 1 pedigree, handcrafted manufacturing in Maranello, proprietary powertrain technology, and a global dealer network built on exclusivity create insurmountable barriers. New entrants face billions in capital requirements and decades of brand-building that money alone cannot buy.
High Switching Costs
8/10Ferrari's customer hierarchy creates powerful social switching costs. Access to limited-edition models depends on ownership history and loyalty — switching to Lamborghini or McLaren means losing your place in multi-year waiting queues and your status within the Ferrari owner community. The social capital of owning a Ferrari is irreplaceable.
Network Effect
6/10Moderate network effects through the owner community — exclusive events, track days, and the Cavalcade programme create a self-reinforcing ecosystem. Formula 1 success elevates brand prestige for all owners. However, Ferrari is inherently anti-network: the brand's value comes from exclusivity, not mass adoption. More owners would dilute the moat.
Economies of Scale
4/10Intentionally weak — by design. Ferrari deliberately limits production to ~14,000 units per year, preventing scale efficiencies that would erode exclusivity. Handcrafted assembly, bespoke personalisation, and specialised components prevent standardisation. R&D costs of €4.29B through 2026 are spread across very few units. The brand/lifestyle segment offers better scale dynamics.
Bull & Bear Thesis
Both sides of the coin — so you can decide for yourself
Bull Case
Bear Case
Growth Drivers
Where the next wave of revenue comes from
Electrification Product Cycle
Six new models in 2025, five more in 2026 including the first fully electric Ferrari. Hybrids already 51% of shipments. New model launches typically drive demand surges and allow price resets. The 2030 target: 40% ICE, 40% hybrid, 20% EV — expanding the addressable market while maintaining exclusivity.
Personalisation & Tailor Made
Expanding bespoke customisation to 20%+ of all sales. New Tailor Made centres in Tokyo and Los Angeles opening in 2027. Personalisation adds high-margin revenue per vehicle without increasing production volume — the ideal growth lever for a scarcity-based model.
Formula 1 & Brand Revenue
Sponsorship and brand revenue grew 22% in 2024 at 70%+ margins. Improved F1 competitive performance drives brand prestige and attracts ownership applications. Racing heritage validates technological leadership and justifies pricing premiums. This segment scales with minimal marginal cost.
Controlled Volume Growth
Gradual, disciplined production increases as demand backlog supports growth. Even 5% volume CAGR (to ~17,500 units by 2030) combined with pricing power could drive 10%+ revenue CAGR. New platforms (Purosangue, 12Cilindri) are ramping through 2026–2027 while maintaining scarcity.
Investment Risks
Every investment has risks — here is what could go wrong
U.S. Tariff & Trade Risk
The U.S. accounts for 28.8% of net sales. Proposed tariffs on European imports could add $50,000+ per vehicle, compressing EBITDA margins by an estimated 50 basis points. Demand destruction at the margin is a real possibility even for ultra-luxury buyers. EU-China tariff disputes add further geopolitical uncertainty.
High SeverityElectrification Execution Risk
€4.29B in R&D through 2026 is a substantial commitment for a company producing 14,000 cars. Hybrid resale values already showing 20–25% discounts vs. new pricing. If the first electric Ferrari fails to excite purists or costs more than projected, margin compression is likely without volume to absorb the investment.
High SeverityChina Market Structural Decline
36% decline in China/HK/Taiwan deliveries in 2024 (328 fewer units). Economic slowdown, "common prosperity" policies, and domestic EV competition from NIO and Li Auto represent structural headwinds. While China is currently ~8% of revenue, losing access to the world's largest luxury market limits long-term growth potential.
Medium SeverityValuation Multiple Compression
Ferrari trades at premium multiples to the broader auto sector (justified by moat and margins). Any material margin compression from tariffs, EV costs, or China weakness could trigger multiple contraction. The stock has already declined ~14% from its January 2025 peak, reflecting growing investor concern about near-term headwinds.
Medium SeverityValuation & Intrinsic Value
What is this business actually worth?
As of 17 February 2026, Ferrari NV (RACE) is trading at approximately 10% below its estimated intrinsic value based on our discounted cash flow model. With 38% EBITDA margins, 23% ROIC, a multi-year production backlog, and one of the most powerful brand moats on Earth, Ferrari's current share price offers a modest margin of safety for long-term investors willing to hold through near-term tariff and electrification uncertainty.
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This research is for educational purposes only and does not constitute financial advice. The information presented is based on publicly available data and our independent analysis. Always do your own research and consult a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.