Ferrari Races Ahead: $115K Profit Per Car Fuels Stock Surge

ferrari

  • Ferrari’s (RACE) stock surged more than 32 points after exceeding Q4 expectations, with sales up 14% to 1.73 billion euros ($1.8 billion) and EPS at 2.14 euros ($2.22).
  • The company raised its 2025 guidance, projecting over 7 billion euros ($7.2 billion) in net revenue and an EBITDA margin of 38.3%, highlighting its high-margin strategy.
  • Despite potential tariff pressures, Ferrari’s demand remains strong, driven by models like the Purosangue SUV and the sold-out F80 hypercar, with a wait list extending into 2026.

Ferrari (RACE) saw its stock price surge by $32.71 or 7.63% to $461.65 on Tuesday after delivering fourth-quarter results that not only exceeded expectations but also set an optimistic tone for 2025. The luxury automaker, with a market cap of $104.12 billion, reported a 14% increase in global sales to 1.73 billion euros ($1.8 billion) from 1.52 billion euros ($1.58 billion) in 2023, surpassing consensus estimates of 1.64 billion euros ($1.7 billion). Diluted earnings per share (EPS) reached 2.14 euros ($2.22), significantly above the anticipated 1.88 euros ($1.95), with EBITDA climbing 15% to 643 million euros ($666.5 million).

Despite selling just 13,752 units, the company’s high margins drove quarterly revenue to 13.75 billion euros ($14.25 billion), translating to an impressive profit of 111,000 euros ($115,000) per car sold.

CEO Benedetto Vigna attributed these strong financial performances to a strategy focusing on the quality of revenues rather than volume, highlighting the demand for personalized options. This approach not only bolstered 2024 results but also underpinned Ferrari’s bullish outlook for 2025, with net revenue expectations now set at over 7 billion euros ($7.2 billion) and adjusted EBITDA at more than 2.68 billion euros ($2.78 billion). This guidance reflects an impressive EBITDA margin of 38.3% – which demonstrates the company’s operating efficiency and profitability relative to its total revenue – far exceeding industry norms, where even giants like General Motors (GM) operate at much lower margins.

The company’s performance is particularly notable as it navigates potential headwinds such as tariffs from the Trump administration. However, with an average car price around $500,000, additional tariffs seem unlikely to deter Ferrari’s affluent customer base, especially given the brand’s prestige and the extensive wait list extending through 2026.

Ferrari’s sales were bolstered by models like the Purosangue SUV, Roma Spider, and 296 GTS, with the introduction of the high-end SF90 XX and 12Cilindri further driving demand. The debut of the F80 hypercar, with all 799 units pre-sold at 3.6 million euros ($3.9 million) each, underscores the brand’s ability to command premium prices and maintain exclusivity.

Despite a 33.3% drop in unit sales in China in 2024, Ferrari’s global strategy, particularly in North America where it achieves a quarter of its sales, has allowed it to overcome regional weaknesses. This performance, coupled with a product mix favoring high-margin vehicles and personalizations, positions Ferrari as a defensive stock with low earnings volatility, as noted by Morgan Stanley (MS) analyst Adam Jonas, who maintained an ‘Overweight’ rating post-earnings. As of January 29, 2025, Jonas set a price target of $430, which reflects an increase from his previous target of $400 established earlier in January.

Ferrari’s success story is also about to enter a new chapter with the unveiling of its first electric vehicle (EV) at its Capital Markets Day on October 9th, signaling its commitment to innovation while maintaining its luxury positioning in a rapidly evolving automotive landscape.

WallStreetPit does not provide investment advice. All rights reserved.

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