Ferrari Stock (RACE) Surges on Stellar Earnings and Optimistic Guidance

Ferrari (RACE) shares rallied significantly after the Italian luxury carmaker released impressive financial results that exceeded analysts' expectations.

Strong Financial Performance

* Global sales in Q4 2024 rose 14% to €1.74 billion ($1.8 billion), surpassing estimates of €1.64 billion ($1.7 billion).
* Diluted earnings per share (EPS) reached €2.14 ($2.22), surpassing street estimates of €1.88 ($1.95).
* EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 15% to €643 million ($666.5 million), exceeding expectations by €20 million ($20.7 million).

Positive Guidance

* Ferrari boosted its guidance for 2025:
* Net revenues projected to exceed €7 billion ($7.2 billion), up from the previous estimate of €6.7 billion ($6.94 billion).
* Adjusted EBITDA expected to surpass €2.68 billion ($2.78 billion), an increase from the earlier projection of €2.56 billion ($2.65 billion).
* These projections indicate an EBITDA margin of 38.3% for Ferrari, an enviable position in an industry with typically single-digit margins.

Resilience Amidst Challenges

* Ferrari's strong performance in the US and Europe compensated for a decline in unit sales in China.
* Despite potential tariff headwinds from the EU, Ferrari's high price point may minimize their impact on consumer demand.

Long-Term Demand and Growth

* Ferrari's order book extends through 2026, indicating robust demand.
* Analysts view Ferrari as a defensive business with the potential for high single-digit top-line growth and double-digit profit growth.
* Sales were driven by models such as the Purosangue SUV, Roma Spider, and 296 GTS sportscars.
* Ferrari's latest hypercar, the F80, has all 799 units pre-sold despite its premium price.