Observing the market penalize Ferrari has an almost charming quality. Not much has changed outside Maranello’s factory gates. In the assembly hall, workers continue to shuffle past rows of partially completed 12Cilindris. The waiting list is still longer than 2027. Even now, the brand sells more miniature models, jackets, and caps than cars. However, the stock, which is currently trading at $358 and change, is about 31% below its peak. This decline would be concerning for most businesses, but it seems odd for one whose fundamentals have hardly faltered.
The sell-off began in October 2025, when Wall Street saw management’s guidance through the end of the decade as a tacit admission of slower growth. It was a quick, almost instinctive response. In just a few months, shares fell from $519 to the low $300s. The stock surged as much as 11% in a single session in February after Ferrari announced fourth-quarter revenue that exceeded forecasts and pushed its 2026 adjusted EBITDA target above €2.93 billion. It appears that investors think the panic was exaggerated. Though the math is beginning to look intriguing, it’s still unclear if that belief will hold through the upcoming model refresh.
This is the strange part. Ferrari is priced at about 35 times forward earnings, which may seem high until you consider that the trailing average over the last ten years is higher than 41. Strangely, the Italian manufacturer of supercars is now more affordable than it has been in a long time. The gross margin of the business is close to 52%. The operating margin is approaching 30%. To put things in perspective, that is more akin to a software company than an automaker. In contrast, Ford sells about 12 times as many cars while operating on extremely thin single-digit margins.
The entire tactic is the scarcity game. Over the course of its existence, Ferrari has sold roughly 330,000 vehicles; Toyota can match that number in a single week. However, the brand has more than 400 million fans worldwide, which accounts for nearly all of the financial data. The F80 costs seven figures when it first launches. There is essentially no additional cost associated with personalization revenue, where a customer spends an additional $50,000 selecting a particular shade of red. Revenue from sponsorship and licensing continues to rise. The hosts of the podcast Acquired spent hundreds of hours researching the company, and they continue to characterize it as distinct from other luxury brands for a reason. It’s not a carmaker posing as an upscale home. It’s an upscale home that also produces automobiles.
However, the bear case isn’t ridiculous. “Numerous well-known brands have previously fallen victim to “luxuryflation,” the subtle erosion of exclusivity as companies pursue profits. Rolex has become diluted. Hermès has exerted pressure. Ferrari’s current approach is in conflict between meeting Wall Street’s desire for expansion and safeguarding the waiting list. Pre-orders for the brand’s first entirely electric vehicle, the Elettrica, are already open and will be delivered in May. The thesis falters if purists reject it or if the order book shrinks for the flagship combustion models.
The visibility of the current setup is what makes it appealing. Investors have been informed by management that the order book already extends through the end of 2027. It’s not a forecast. Some of the richest people in the world have already paid for that money. In fact, deliveries decreased in Q4, but this was due to Ferrari’s decision to cap them rather than a softening of demand. To maintain brand equity, the company purposefully reduced shipments in Greater China and the Americas. Not many businesses have the courage to do that. Fewer still receive rewards for it.
The historical parallel is difficult to ignore. The same “expensive forever” brands proved to be deals when LVMH shares fell in 2023 due to concerns about a slowdown in luxury. Ferrari has a similar vibe. In retrospect, a sub-$400 entry point appears to be the kind of price that patient investors typically recall, even though it is not exactly the same. It’s another matter entirely whether it remains below that threshold long enough for everyone to take action.
