What is the Performance of Ferrari (RACE) Stock for Investors?

Highlights:

• Ferrari shares dropped sharply in early October after management disclosed financial goals that fell short of investor expectations.
• The companys strong brand continues to give it significant pricing power.
• With shares trading well below all-time highs, Ferrari may offer an appealing opportunity for long-term investors.

Ferrari (NYSE: RACE) has a storied presence in the automotive sector, renowned for its engineering, design excellence, and racing heritage. Its vehicles are often considered collectibles, contributing to ongoing demand and success worldwide. But how has this iconic automaker performed for shareholders historically?

Stock Performance Overview

Over the past one, three, and five years, Ferrari shares returned -14%, 82%, and 93%, respectively (as of Dec. 8). Only the three-year return slightly outpaced the S&P 500, though the margin was minimal. The company also pays a dividend of nearly 3 per share, which is included in these total returns.

In October, Ferrari's stock experienced a sharp 15% decline in a single day after executives revealed long-term targets that disappointed the market. Management projected a 5% compound annual revenue growth and 6% annual operating income growth from 2025 to 2030, which is lower than Ferraris historical performance.

Long-Term Perspective

Despite short-term volatility, Ferrari has delivered outstanding long-term returns. Since its IPO in October 2015, shares have gained a total of 673%, compared with 306% for the S&P 500. This underscores the importance of focusing on the companys strong fundamentals.

Ferraris brand is its most valuable asset, underpinning its status as a luxury manufacturer. The limited-edition F80, priced at $3.7 million, sold out immediately with only 799 units produced, demonstrating clear pricing power. The company maintains controlled production, with Q3 unit sales up just 0.5% year-over-year, yet revenues and net income grew 12% and 17%, respectively, between 2019 and 2024. This suggests management may be taking a conservative approach with its latest outlook.

Investment Considerations

Ferrari remains a standout in the automotive industry. With shares currently about 25% below their peak, long-term investors may find the stock attractive. While some analysts have highlighted other investment opportunities, Ferraris strong brand, exclusivity strategy, and historical growth make it a stock worth examining closely.

Sources:

• What Has Ferrari (RACE) Stock Done For Investors?

Author: Maya Henderson
Maya Henderson is a journalist focused on technology and startups. She has experience in leading IT publications and excels at conducting interviews and creating visual content.