Ferrari Surges After Exceptional Earnings, Revises Guidance

Headline: Ferrari (RACE) Zooms Higher on Stellar Results and Upgraded Outlook

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Ferrari's stock soared in premarket trading, buoyed by exceptional quarterly results that surpassed market expectations and a bullish guidance revision.

The Italian luxury automaker reported a 14% surge in global sales for the fourth quarter to €1.74 billion ($1.8 billion), exceeding analyst estimates of €1.64 billion ($1.7 billion). Diluted earnings per share (EPS) also handily beat consensus, reaching €2.14 ($2.22) against expectations of €1.88 ($1.95).

Ferrari's EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 15% to €643 million ($666.5 million), surpassing forecasts by €20 million ($20.7 million). These impressive results fueled a nearly 9% rally in the company's shares.

"Quality of revenues over volumes drives our remarkable financial results in 2024, driven by our solid product mix and personalization demand," stated Ferrari CEO Benedetto Vigna. "Based on these fundamentals, we anticipate continued robust growth in 2025, enabling us to exceed most of our profitability targets for 2026 a year ahead of plan."

Ferrari raised its guidance for 2025 in light of its strong performance, projecting net revenues to surpass €7 billion ($7.2 billion) from the previous estimate of €6.7 billion ($6.94 billion). Adjusted EBITDA is also expected to exceed €2.68 billion ($2.78 billion), up from €2.56 billion ($2.65 billion).

These projections imply an EBITDA margin of 38.3% for Ferrari, a figure that would make the automaker an industry leader in a sector where margins typically range from mid to high single digits. GM's (GM) EBIT-adjusted margin, for example, stood at 5.3% in the fourth quarter.

Despite selling only 13,752 units, Ferrari's high margins generated sales of €13.75 billion ($14.25 billion) for the quarter, equating to a staggering €111,000 ($115,000) profit per vehicle sold.

Ferrari's strength in the US and Europe offset weakness in China, where unit sales declined 33.3% year-over-year. China accounts for only 8% of Ferrari's sales, while North America contributes 25%.

Potential tariffs on EU goods would typically be seen as a challenge; however, for products averaging $500,000, an additional 10-20% may not significantly deter affluent buyers. In fact, Ferrari's wait list extends through 2026, suggesting that demand is not a concern for the automaker.

Ferrari attributed its sales success to the Purosangue SUV, Roma Spider, and 296 GTS sportscars. Shipments of the higher-end SF90 XX and 12Cilindri also commenced in the second half of the year. Moreover, the company's latest hypercar, the F80, debuted in Q4, with all 799 units already accounted for despite a price tag of €3.6 million ($3.9 million).