Ferrari N.V. (NYSE: RACE)

Sector: Consumer Cyclical Industry: Auto Manufacturers CIK: 0001648416
Market Cap 59.53 Bn
P/B 13.41
P/E 31.60
P/S 7.15
ROIC (Qtr) 20.46
Div Yield % 1.03
Rev 1y % (Qtr) 13.72
Total Debt (Qtr) 3.38 Bn
Debt/Equity (Qtr) 0.76

About

Ferrari N.V., popularly known as Ferrari, operates as a multinational luxury sports car manufacturer, its stock symbol being RACE. The company's operations are primarily based in the global luxury automotive industry, with its headquarters situated in Maranello, Italy. Ferrari's core business activities encompass the design, manufacturing, and sale of high-performance sports cars. Its product range is diverse, including the 488 GTB, F8 Tributo, and Roma models, which are celebrated for their superior performance, style, and craftsmanship. The...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 2.74B provides robust 0.81x coverage of total debt 3.38B, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 2.74B provides exceptional 796.84x coverage of minority interest expenses 3.43M, showing strong core operations.
  • Operating cash flow of 2.74B provides exceptional 77.95x coverage of interest expenses 35.09M, showing strong debt service capability.
  • Robust free cash flow of 2.17B exceeds capital expenditure of 568.68M by 3.81x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 2.74B provides 3.70x coverage of SG&A expenses 739.68M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 2.74B barely covers its investment activities of (1.14B), with a coverage ratio of -2.40, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (1.14B) provide weak support for R&D spending of 1.09B, which is -1.05x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Free cash flow of 2.17B represents just -8.46x of debt issuance (256.11M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 2.74B is outpaced by equity issuance of (831.26M) (-3.29 ratio), indicating concerning reliance on equity markets for funding operations.
  • Short-term investments of 1.97B exceed receivables of 411.70M by 4.78x, indicating potentially inefficient capital allocation given collection cycle needs.

Peer comparison

Companies in the Auto Manufacturers
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TSLA Tesla, Inc. 1,386.72 Bn 263.09 14.50 7.70 Bn
2 TM Toyota Motor Corp/ 286.80 Bn 9.26 0.87 287.20 Bn
3 GM General Motors Co 81.08 Bn 25.50 0.44 130.28 Bn
4 RACE Ferrari N.V. 59.53 Bn 31.60 7.15 3.38 Bn
5 F Ford Motor Co 55.12 Bn 17.49 0.30 161.94 Bn
6 HMC Honda Motor Co Ltd 42.13 Bn 9.65 0.29 88.09 Bn
7 STLA Stellantis N.V. 29.73 Bn -10.57 0.17 -
8 XPEV Xpeng Inc. 17.74 Bn -44.29 1.79 4.87 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 6.92 1.20
EV to Cash from Ops. EV/CFO 28.20 5.88
EV to Debt EV to Debt 22.81 28.94
EV to EBIT EV/EBIT 31.80 11.38
EV to EBITDA EV/EBITDA 24.20 7.73
EV to Free Cash Flow [EV/FCF] EV/FCF 35.60 8.79
EV to Market Cap EV to Market Cap 1.30 304,683.06
EV to Revenue EV/Rev 9.26 16.98
Price to Book Value [P/B] P/B 13.41 3.04
Price to Earnings [P/E] P/E 31.60 9.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.59
Dividend Payout Ratio % Div Payout % (Qtr) 32.50 6.04
Dividend per Basic Share Div per Share (Qtr) 3.43 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 33.34 2.58
Interest Coverage Int. cover (Qtr) 69.12 8.74
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -0.05 -59.34
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -1.74 62.23
Dividend Growth (1y) % Div 1y % (Qtr) 40.40 1.34
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 19.70 -1,057.18
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 16.52 -19.82
EBIT Growth (1y) % EBIT 1y % (Qtr) 22.07 -1,011.94
EBT Growth (1y) % EBT 1y % (Qtr) 20.83 -216.80
EPS Growth (1y) % EPS 1y % (Qtr) 19.47 -59.11
FCF Growth (1y) % FCF 1y % (Qtr) 34.71 -21.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 19.37 -10.92
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.88 0.33
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio 0.00 0.40
Current Ratio Current Ratio 0.00 1.21
Debt to Equity Ratio Debt/Equity (Qtr) 0.76 0.99
Interest Cover Ratio Int Coverage (Qtr) 69.12 8.74
Times Interest Earned Times Interest Earned (Qtr) 69.12 8.74
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 38.30 -2,589.89
EBIT Margin % EBIT Margin % (Qtr) 24.75 -104,371.67
EBT Margin % EBT Margin % (Qtr) 28.70 -3,156.67
Gross Margin % Gross Margin % (Qtr) 51.30 -649.09
Net Profit Margin % Net Margin % (Qtr) 22.60 -3,158.82