After a 35% drawdown, it may still be too early for $RACE to leave the pit lane.

Luxury product ≠ luxury investment.

I ran a DCF to see whether the selloff is justified.

Key assumptions:

1. Explicit growth @ 4-5%

2. Long-term growth in perpetuity @ 2.6%

3. I am factoring EBITDA margin expansion for Ferrari from 40% today to 52% in 10 years.

4. WACC @ 7.6%. The implied market return used in the calculation is 8.2%

5. An EBITDA exit multiple of 17.3

6. Tax rate 19%

7. The input that drives reinvestment is the most recent Sales/Capital ratio adjusted for artificially inflated assets that don’t scale with growth (=1.5).

The numbers don’t confirm a clear bargain yet. My DCF puts Ferrari at 102% of fair value, suggesting the stock is roughly fairly valued even after the drawdown. On a relative basis, consensus EPS of ~$11.2 in 2026 implies a forward P/E of ~30x. With ROIC around 25%, that multiple embeds an implied long-term EPS growth rate of roughly 12%. That’s a demanding assumption for a company already operating at very high margins and capital efficiency. In other words, both absolute and relative valuation point to the same conclusion: today’s price leaves little room for disappointment, not a clear margin of safety.

My base case = fair value, so the bull case has to be about what breaks better than expected, not heroic assumptions everywhere. For Ferrari, that usually means pricing power + capital efficiency, not volume miracles.

Conclusion: Ferrari is a wonderful company with a fair valuation. It could be a solid investment for a patient investor, but not suitable for those seeking a large margin of safety.

Keep in mind that this is an estimate - just like any DCF model. I’m not claiming perfection, but I do trust these calculations to guide my own investments. Hopefully, they can help inform yours as well.

Disclaimer: not financial advice. Do your own research.