Cash generation
€1.41bn FCF
More revenue remains as cash.
FY2025 free cash flow was the highest in the annual sample. FCF margin rose from 3.73% in 2020 to 19.72% in 2025.
2020 was a pandemic-affected starting point.
Ferrari N.V. · NYSE: RACE
A strong business.
A demanding valuation.
Does Ferrari’s profitability and cash generation support its premium? Explore the financial results, investor experience and peer-multiple scenario together.
Cutoff share price
€347.95
$389.91 converted to EUR
P/E
37.30×
TTM earnings estimate
EV/EBITDA
22.03×
Porsche scenario: 9.48×
ROIC
31.19%
FY2025 · simplified group basis
Estimated WACC
7.32%
Cutoff estimate · debt-cost proxy
FCF margin
19.72%
FY2025 · group CFO less CapEx
The findings that matter
Business quality, stock performance and price are related—but they answer different questions.
Investor experience
6.72% vs 15.06%
Ferrari lagged SPY in 2026 YTD.
Ferrari’s 33.55% annualized volatility exceeded SPY’s 13.01%. Its YTD Sharpe ratio was 0.31, versus 1.18 for SPY.
USD adjusted-price return sample through cutoff.
Valuation dependence
−58.53%
A substantial premium to retain.
Applying Porsche’s reconciled 9.48× multiple to Ferrari’s TTM EBITDA implies €144.29 per share, versus €347.95 at cutoff.
Peer-multiple scenario, not a price forecast.
The valuation question
Select chart to enlargeCapital efficiency: FY2025 ROIC of 31.19% exceeds the notebook’s estimated WACC of 7.32% by 23.87 percentage points. The dates and estimation bases differ; this comparison supports a business-quality argument, not a stand-alone share-price conclusion.
Growth translates into stronger cash generation
Revenue rose from €3.46bn to €7.15bn over the annual sample. Operating margin expanded, while revenue growth slowed to 7.02% in FY2025.
Revenue & free cash flow
Enlarge ↗Profitability margins
Enlarge ↗FY2025 cash conversion: 88.23%, versus 21.22% in FY2020.
H1 comparison
| Metric | H1 2025 | H1 2026 |
|---|---|---|
| Revenue (€m) | 3,578 | 3,786 |
| Operating margin | 30.58% | 30.45% |
| Net margin | 23.36% | 23.11% |
| Free cash flow (€m) | 779 | 811 |
| FCF margin | 21.77% | 21.42% |
| Cash conversion | 93.18% | 92.69% |
From rounded notebook inputs. H1 results are compared with H1, not a complete financial year.
Capital efficiency
| Measure | Result |
|---|---|
| FY2025 effective tax rate | 22.49% |
| Average invested capital (€m) | 5,242.08 |
| FY2025 ROIC | 31.19% |
| Estimated WACC | 7.32% |
| ROIC − WACC | 23.87 pp |
Simplified consolidated ROIC subtracts all cash. WACC uses market equity, book debt, a SPY-based beta, a EUR risk-free proxy and historical financing costs.
H1 cash flow increased in absolute terms, but FCF margin and cash conversion weakened slightly.
Business growth does not guarantee market leadership
Ferrari’s historical arithmetic return exceeded SPY’s, but its Sharpe and Sortino ratios were lower in both measurement periods.
Historical performance
Enlarge ↗2026 YTD performance
Enlarge ↗Historical · 2020–2025
| Metric | Ferrari | SPY |
|---|---|---|
| Arithmetic annualized return | 18.50% | 16.02% |
| Annualized volatility | 30.58% | 20.75% |
| Sharpe | 0.51 | 0.64 |
| Sortino | 0.74 | 0.89 |
| Maximum drawdown | −38.29% | −33.72% |
| Beta against SPY | 0.93 | 1.00 |
| Historical CAPM estimate | 15.15% | — |
| Arithmetic return − CAPM | +3.35 pp | — |
Arithmetic annualized return = mean daily return × 252; this is not CAGR.
2026 YTD · through 9 October
| Metric | Ferrari | SPY |
|---|---|---|
| Actual YTD return | 6.72% | 15.06% |
| Annualized volatility | 33.55% | 13.01% |
| Sharpe | 0.31 | 1.18 |
| Sortino | 0.47 | 1.77 |
| Maximum drawdown | −19.58% | −8.88% |
| Beta against SPY | 1.06 | 1.00 |
| Annualized YTD CAPM estimate | 20.13% | — |
Actual YTD return is not annualized. Volatility, risk-adjusted ratios and the YTD CAPM estimate are annualized. Compare CAPM with arithmetic annualized stock return, not actual YTD return.
Risk-adjusted performance
Enlarge ↗Daily downside risk
Enlarge ↗A premium is observable. Fair value is a judgment.
Ferrari trades above Porsche on EV/EBITDA, but below it on P/E. The choice of denominator matters.
Valuation comparison
| Metric | Ferrari | Porsche |
|---|---|---|
| P/E | 37.30× | 44.89× |
| EV/EBITDA | 22.03× | 9.48× |
| TTM EPS estimate | €9.33 | €0.93 |
| Enterprise value (€m) | 62,716.11 | 45,180.94 |
| TTM EBITDA (€m) | 2,847.00 | 4,765.00 |
Porsche figures use the reconciled enterprise value and multiple. EPS uses current estimated shares, not reported weighted-average diluted shares.
Peer-multiple scenario
| Input / result | Value |
|---|---|
| Applied Porsche multiple | 9.48× |
| Implied enterprise value (€m) | 26,994.78 |
| Implied equity value (€m) | 25,308.66 |
| Implied price per share | €144.29 |
| Cutoff price per share | €347.95 |
| Implied downside | −58.53% |
Calculated with the unrounded multiple. Equity bridge deducts debt and non-controlling interests, then adds cash.
Current price vs peer-multiple scenario
Enlarge ↗Comparability limits: both groups include financing activities. Porsche market capitalisation prices all shares using its listed preferred-share price; its H1 2026 depreciation input is an estimate. This is a single-peer exercise with material assumptions.
Price trend & moving averages
The original candlestick and volume chart provides context for the fundamental and valuation findings.