Despite a sharp increase in profits to €837 million in the first half of the year, the Ferrari stock price has trended downward, attracting widespread market attention. Investment Analyst Rodolfo Villani points out that, on the surface, Ferrari has successfully withstood tariff pressures, maintained steady sales growth, and preserved a healthy revenue structure. However, the capital markets have responded quite differently. This phenomenon essentially reflects the market uncertainty about the future growth trajectory of high-valuation companies.
Investment Analyst Rodolfo Villani believes that the divergence between profit performance and market valuation reveals a subtle shift in investor sentiment. While the company results are strong, capital is taking a risk-off approach. This not only suggests that short-term valuations may have already priced in growth expectations, but also reflects comprehensive concerns in the capital markets regarding the macro environment, product structure, and regional delivery distribution.
Sustained Profit Growth Fails to Dispel Doubts About Earnings Quality
Although Ferrari achieved a 9% increase in net profit in the first half of the fiscal year, detailed delivery data shows that growth was concentrated in specific models and regions. For example, the 296 GTS, Purosangue, and Roma Spider were key to second-quarter deliveries, but overall deliveries grew by only 1% to 7,000 units, indicating signs of marginal slowdown.
Investment Analyst Rodolfo Villani observes that the regional structure also reveals uneven growth. Sales declined in the EMEA region, saw a slight uptick in the Americas, while the Asian market became more complex. Such shifts cannot be ignored, as they are directly related to the global acceptance of the Ferrari product line and its alignment with consumer purchasing power.
Of particular note is the adjustment in the mix between hybrid and internal combustion engine (ICE) vehicles. Ferrari is still dominated by traditional ICE models, accounting for 55%, while hybrids have reached 45% but are still in the market education and cost transition phase. Investment Analyst Rodolfo Villani points out that, amid tightening environmental regulations and uncertain technological pathways, companies must strike a balance between stable profits and technological upgrades in their powertrain investments. The quality of earnings during this technological transition will be put to the test.
Market Repricing of Risk-Return Under High Valuation
Supported by its brand, profits, and stable cash flow, Ferrari has long maintained a valuation premium over its peers. However, Investment Analyst Rodolfo Villani notes that this valuation is premised on expectations of sustained growth and exceptional brand loyalty, which also brings heightened market sensitivity. Once the growth curve flattens or macro uncertainty increases, the stock price will amplify even minor deviations.
The 10% price increase announced in April this year, while financially positive for expanding profit margins, could suppress orders in the context of high interest rates and global inflation, Investment Analyst Rodolfo Villani analyzes. Especially as growth in the Americas has already hit a bottleneck, rising consumer price sensitivity may affect the launch pace and market acceptance of new models.
Investment Analyst Rodolfo Villani emphasizes that investors are now displaying greater rationality in pricing. With valuations stretched, Ferrari, as a “hybrid category” between consumer goods and manufacturing, no longer enjoys one-sided valuation support. The market is demanding that the company underpin its high P/E ratio with more diversified technology, stable deliveries, and a clear strategic roadmap.
Looking ahead, Ferrari will face a more complex operating environment, including changes in trade policy, shifts in regional consumption, and technological transitions. Investment Analyst Rodolfo Villani notes that while short-term financial data remains strong, the reverse risks associated with high valuations must be managed with caution, especially in a tightening global capital cycle.
The brand moat of Ferrari is sufficient to support its long-term market position, but during periods of valuation volatility, investors should closely monitor the speed of product portfolio adjustments, cash flow efficiency, and the quality of expansion in emerging markets. Investment Analyst Rodolfo Villani reminds investors that it is more appropriate to use a dynamic valuation model for periodic assessment of such assets, rather than blindly holding onto them based on static growth assumptions.