Ferrari N.V. (RACE): A Bull Case Theory

We came across a bullish thesis on Ferrari N.V. on Coughlin Capital’s Substack by Brian Coughlin. In this article, we will summarize the bulls’ thesis on RACE. Ferrari N.V.'s share was trading at $333.46 as of January 28th. RACE’s trailing and forward P/E were 30.94 and 29.41, respectively according to Yahoo Finance.

Ferrari N.V., through its subsidiaries, engages in design, engineering, production, and sale of luxury performance sports cars worldwide. Ferrari’s business continues to be defined by control and scarcity, which remain its primary drivers of value. The company deliberately manages production to keep demand ahead of supply, maintaining long waiting lists and protecting its brand equity. This strategy allows Ferrari to generate compounding through price and mix rather than volume, with personalization and a ladder of customer engagement turning first-time buyers into repeat and “special series” buyers.

Despite recent multiple compression, the fundamentals remain strong: margins are exceptionally high, near-term guidance was raised, and the company continues to execute consistently across product and financial metrics. The recent selloff reflects market reactions to the 2030 Capital Markets Day, where management outlined a €9 billion revenue target with roughly 5% CAGR and a conservative EV mix of 40% ICE, 40% hybrid, and 20% electric. While the market initially reacted negatively, these moves protect long-term brand equity and align with client preferences, even as they temper growth expectations.

Additional pressures include luxury demand sensitivity, regional mix risk, and a modest shareholder overhang from Exor’s stake sale, but none undermine the core business model. Ferrari’s capital allocation remains disciplined, prioritizing R&D, product development, and brand protection, while excess cash is returned to shareholders through buybacks, particularly attractive when multiples are lower.

Overall, Ferrari exemplifies a luxury compounder whose intrinsic value is resilient, with strategic control over production, pricing, and customer experience driving sustainable profitability. The stock’s near-term volatility creates an opportunity for investors to acquire a rare, high-margin franchise at a more attractive valuation, while the long-term thesis remains intact.

Previously, we covered a bullish thesis on Tesla, Inc. (TSLA) by Oliver | MMMT Wealth in April 2025, which highlighted Tesla’s long-term vision beyond automobiles, despite weak deliveries and margin pressure. TSLA’s stock price has appreciated by approximately 84.94% since our coverage. Brian Coughlin shares a different perspective but emphasizes Ferrari’s scarcity and mix-driven compounding, showing how luxury autos maintain resilient profitability.

Ferrari N.V. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held RACE at the end of the third quarter which was 43 in the previous quarter. While we acknowledge the potential of RACE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.