Ferrari (RACE) Stock Soars on Strong Earnings and Guidance

Ferrari (RACE) stock rallied significantly after the Italian luxury automaker reported impressive results that surpassed both analyst expectations and its own guidance. The company's affluent clientele is also expected to provide a buffer against potential tariff pressures.

Q4 Financial Performance

* Global sales surged 14% year-over-year to 1.74 billion euros ($1.8 billion), exceeding estimates of 1.64 billion euros ($1.7 billion).
* Diluted earnings per share (EPS) reached 2.14 euros ($2.22), outpacing street expectations of 1.88 euros ($1.95).
* EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 15% to 643 million euros ($666.5 million), exceeding expectations by approximately 20 million euros ($20.7 million).

Guidance Raised

Ferrari's strong results have prompted the company to raise its 2025 guidance:

* Net revenues projected at over 7 billion euros ($7.2 billion), up from previous estimates of 6.7 billion euros ($6.94 billion).
* Adjusted EBITDA forecast at over 2.68 billion euros ($2.78 billion), compared to 2.56 billion euros ($2.65 billion) earlier.

Exceptional Margins

These figures translate to an EBITDA margin of 38.3% for Ferrari, placing it among the most profitable automakers in the industry. This is significantly higher than the industry average, which typically falls in the mid- to high single digits.

Global Performance

Ferrari's strong performance in the US and Europe offset weakness in China, where unit sales declined 33.3% year-over-year. However, China accounts for only 8% of Ferrari's sales, while North America contributes a quarter of its sales.

Strong Demand and Low Volatility

Ferrari's order book extends well into 2026, indicating that demand remains robust. "We continue to view Ferrari as a uniquely positioned, defensive business that can achieve high single-digit top-line growth and double-digit profit growth with relatively low volatility to earnings," said Morgan Stanley analyst Adam Jonas.

Product Highlights

Sales were primarily driven by the Purosangue SUV, Roma Spider, and 296 GTS sportscars. Higher-end models such as the SF90 XX and 12Cilindri also commenced shipments in the latter half of the year.

Future Outlook

Ferrari unveiled its latest hypercar, the F80, in Q4. Despite its hefty price tag of 3.6 million euros ($3.9 million), all 799 units have already been sold. The company also announced plans to unveil its first EV on October 9th at its Capital Markets day.