Is Ferrari (NYSE:RACE) Still Worth The Price After Recent Share Price Weakness?

• If you have ever wondered whether Ferrari shares are priced for perfection or still offer value, looking at the numbers behind the current market price can help frame that question clearly.
• The stock recently closed at US$379.27, with returns of 1.8% over 7 days, a 3.5% decline over 30 days, year-to-date (YTD) returns of 2.0%, and a 10.7% decline over the last year. Over 3 years and 5 years, the returns sit at 67.0% and 79.8% respectively.
• Recent news coverage has focused on Ferrari as a high end brand within the global auto space and how investors weigh its luxury positioning against broader sector trends. This context matters because it helps explain why the share price can move differently to more mass market car makers, especially when sentiment around premium brands shifts.
• Despite the strong long term share price record, Ferrari currently has a valuation score of 0 out of 6. This sets up a useful comparison across different valuation methods and, later in the article, a look at a more detailed way to think about what the stock might be worth.

Ferrari scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Ferrari Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes estimates of the cash Ferrari could generate in the future and discounts those amounts back to today, to give a single estimate of what the equity might be worth per share right now.

For Ferrari, the model used here is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections. The latest twelve month Free Cash Flow is about €1,278.97m. Analyst based estimates extend to 2030, with Simply Wall St extrapolating further years. By 2030, projected Free Cash Flow is €2,101.33m, with intermediate annual projections between 2026 and 2035 ranging from roughly €1,442.72m to €2,622.99m before discounting.

Discounting these future cash flows back to today in the model produces an estimated intrinsic value of €108.71 per share. When this is compared with the recent US$379.27 share price, the DCF output implies the stock is 248.9% above that intrinsic estimate, so on this measure the shares screen as expensive.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Ferrari may be overvalued by 248.9%. Discover 878 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Ferrari.

Approach 2: Ferrari Price vs Earnings

For a profitable company like Ferrari, the P/E ratio is a useful way to relate what you pay per share to the earnings that each share currently generates. It gives you a quick sense of how many years of current earnings the market is willing to pay for today.

What counts as a “normal” P/E depends on what investors expect for future earnings growth and how risky they think those earnings are. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually points to a lower “fair” P/E range.

Ferrari currently trades on a P/E of 35.58x. That sits well above the Auto industry average of 18.20x and the peer average of 18.44x. Simply Wall St’s Fair Ratio for Ferrari is 16.52x, which is a proprietary estimate of what the P/E might be given factors such as earnings growth, industry, profit margins, market cap and risks. Because it blends these company specific drivers, the Fair Ratio can be more tailored than a simple comparison to industry or peer averages.

With the current P/E of 35.58x versus a Fair Ratio of 16.52x, the shares screen as expensive on this metric.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1457 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Ferrari Narrative

Earlier we mentioned that there is an even better way to understand valuation. Narratives let you attach your own story about Ferrari to the numbers by linking your view on its future revenue, earnings and margins to a financial forecast. This turns that into a fair value you can compare with the current price, and then updates that view automatically on Simply Wall St’s Community page when new earnings or news arrive. One investor might share a Narrative that leans toward the higher US$597.04 fair value based on strong demand for new models and brand strength. Another might anchor closer to US$397.31 if they focus more on risks such as model saturation or economic pressures. You can see both, stress test your own assumptions, and decide how your fair value stacks up against the live share price.

Do you think there's more to the story for Ferrari? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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