Is Ferrari N.V. (RACE) A Good Stock To Buy Now?

Is RACE a good stock to buy? We came across a bullish thesis on Ferrari N.V. on r/ValueInvesting by According-Buyer6688. In this article, we will summarize the bulls’ thesis on RACE. Ferrari N.V.'s share was trading at $358.50 as of April 21st. RACE’s trailing and forward P/E were 34.08 and 31.65 respectively according to Yahoo Finance.

Ferrari is a luxury automotive stock that recently reached around 300 euro, a level viewed as an attractive entry point given its current valuation and long-term growth profile. The investment case is centered on the perception that Ferrari trades at roughly a 32x price-to-earnings multiple compared with a historical or sector norm closer to 45x, suggesting a notable discount despite its premium positioning.

The company is expected to grow earnings per share about 8% annually, supported by strong pricing power, brand scarcity, and structurally high demand that continues to be described as effectively unlimited at the top end of the luxury market. In addition, Ferrari is executing a shareholder-friendly capital allocation strategy, including a €3.5 billion share buyback program representing approximately 5–8% of total shares, alongside a dividend yield of around 1.5%, equating to roughly 40% of profits returned to shareholders.

The business also benefits from strategic optionality, including a planned expansion into the yachting industry from 2027, which could further enhance earnings growth. Regulatory tailwinds are also cited, including the European Union’s removal of the combustion engine ban, which may support continued demand for high-performance internal combustion vehicles.

RACE is viewed as a strong moat business that is temporarily mispriced relative to its long-term earnings power. If valuation re-rates toward a historical 45x multiple, the stock could justify a fair value range of approximately 450 to 510 euro, implying potential upside of roughly 50% to 70% from current levels, with cyclical mispricing versus prior luxury dislocations framing the opportunity.

Previously, we covered a bullish thesis on Tesla, Inc. (TSLA) by Oliver | MMMT Wealth in April 2025, which highlighted EV slowdown, autonomy/AI optionality, and margin compression concerns. TSLA's stock price has appreciated by approximately 65.63% since our coverage. According-Buyer6688 shares a similar view but emphasizes Ferrari (RACE) luxury moat, valuation re-rating, and capital returns in the automotive sector.

Ferrari N.V. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held RACE at the end of the fourth quarter which was 46 in the previous quarter. While we acknowledge the risk and potential of RACE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RACE and that has 10,000% upside potential, check out our report about this cheapest AI stock.