Ferrari (RACE), a prized player in the luxury automobile market and a favorite among investors, faces challenges ahead.
The Italian manufacturer, headquartered in Maranello, presented its new long-term strategy during a recent capital markets presentation, but the response from investors was lukewarm.
Ferrari projected its 2025 net revenue to reach at least 7.1 billion euros ($8.24 billion), an increase from an earlier expectation of over 7 billion euros; however, this still fell short of investor expectations for a stock trading at a staggering 40 times its anticipated earnings, as noted by Yahoo Finance. The 2025 adjusted EBITDA is estimated to exceed 2.72 billion euros ($3.14 billion), a slight improvement over the previously stated 2.68 billion euros ($3.1 billion), yet still deemed insufficient by investors.
Moreover, the automaker’s long-term outlook was considered overly cautious. Ferrari’s revenue goal for 2030 is set at 9 billion euros ($10.4 billion) alongside a target for adjusted EBITDA of 3.6 billion euros ($4.16 billion) or more, which did not meet market hopes. According to Bloomberg, RBC analyst Tom Narayan pointed out that Ferrari’s EBITDA projection implies a 6% CAGR (compound annual growth rate), significantly lower than the 10% rate anticipated during the company’s capital markets event in 2022.
Following this revised guidance, Ferrari’s stock price dropped by over 10%.
Despite posting impressive adjusted EBITDA margins in the high 30% range, Ferrari is undergoing a transitional phase.
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The company previously aimed for electric vehicles (EVs) to account for 40% of their sales within the next three years. Currently, they anticipate that only 20% of their sales will be fully electric, while gas-powered and hybrid vehicles are projected to each constitute 40% of sales.
Ferrari attributes these adjustments to a “client-focused” strategy, noting that customers have not shown overwhelming enthusiasm for an electric Ferrari. Other luxury brands, including Lamborghini, Bentley, and Porsche (PAH3.DE), have similarly dialed back their electric vehicle goals in light of market realities.
Nevertheless, Ferrari plans to unveil its upcoming EV and has provided additional insights into this model. Named the Ferrari Elettrica, the EV is set to launch in 2026, adding yet another line to the company’s offerings.
The chassis, showcased on Thursday in Maranello, will feature a four-seat grand touring design powered by four electric motors, one for each wheel. The Elettrica boasts more than 1,000 horsepower and can accelerate from 0 to 60 mph in just 2.5 seconds.
“With the new Ferrari Elettrica, we reaffirm our commitment to innovation by merging cutting-edge technology, artistic design, and expert craftsmanship,” stated John Elkann, executive chairman of Ferrari.
