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Ferrari transcends the typical car manufacturer; it encapsulates a luxury brand steeped in exclusivity. The demand for its vehicles far exceeds the limited production, contributing to the elevated prices of its models.
Unlike mainstream automakers, Ferrari does not emphasize volume for revenue; instead, it prioritizes premium pricing alongside superior engineering. This stock performance aptly reflects the brand’s strategy.
Let’s explore the value of a $10,000 investment in Ferrari stock, made when the company went public in 2015.
A Luxury Brand With Strong Financials
Recently reported revenue growth for 2024 reached 11.8%, solidifying Ferrari’s status as a leading luxury brand. The company’s achievements reflect a broader trend: high-net-worth spending remains robust even amidst economic fluctuations, with many investors considering luxury automobiles as stable assets.
The stock benefits significantly from Ferrari’s strategic approach. The brand’s strategy of creating scarcity to drive demand is evidently effective, as evidenced by the fullness of its order books extending through 2026. This tactic has bolstered investor confidence, maintaining stock resilience amid challenges faced by other automakers in a shifting market landscape.
The Recent Market Disruption
Recently, shares experienced a decline after Exor, Ferrari’s largest shareholder, announced intentions to sell 7 million shares. To mitigate the impact, Ferrari plans to buy back 10% of these shares for up to €300 million (approximately $318 million) as part of a broader €2 billion repurchase initiative.
Actions taken by large shareholders can exert temporary pressure, resulting in a 7.9% drop in Ferrari’s stock — its largest intraday decline in several months.
Your $10,000 Investment Today
Ferrari debuted on the stock market in October 2015 at a price of $52 per share. Accounting for stock splits and dividends, that initial investment has experienced significant growth. As of February 27, Ferrari’s stock price stood at $463.56 per share, meaning that a $10,000 investment made at the time of the IPO would now be valued at approximately $89,124.
Ferrari’s capacity to retain pricing power, expand judiciously, and sustain high demand positions it as one of the best-performing automotive stocks over the past decade. Whether this trend will persist hinges on its responses to market dynamics, but for long-term investors, Ferrari has proven to be a high-speed success.