Ferrari (NYSE:RACE) is a High Performance ‘Machine’
Ferrari, the world’s Top automotive brand, is an iconic performance machine, and not just its Supercars.
A look the financial performance shows exceptional performance, too.
No car maker in the sluggish, low valation sector has data that apply to Ferrari.
The Q-1 data showed strong earnings of 0.96/share beat estimates by 0.12/share, while revenue grew 1.2% to $991.3-B just shy of $1-B.
Those earnings are up 20% Y-Y from Q-1 Y 2017. On the revenue front, sales actually grew 6.3% adjusted for currency fluctuations.
And, look at just how much the bottom line expanded Vs the top line, which shows a strong widening in margins.
Unlike a number of stocks on your screens, Ferrari is not a big beneficiary of the overhauled US corporate tax code. While it did have a lower tax rate this year than in the same Quarter of Y 2017, it was down just slightly from 28.5% last year to 27.9% this year.
The results get better
Ferrari’s operating cash flow rose 40% Y-Y, while free-cash flow jumped more than 14%.
It then is no surprise that Thursday shares rose to new all-time highs, and then new highs Friday, finishing at $137.08 on the day.
Here is where Ferrari gets the traction
1st, the company’s transition to some of its V12 engine offerings are going very well.
From the press release:
“This achievement was driven by a 23.5% increase in sales of our 12 cylinder models (V12), while the 8 cylinder models (V8) were in line with prior year. The V12 strong performance was led by the 812 Superfast.”
In Q-2, Ferrari fans can look forward to deliveries of the new Portofino, its hardtop convertible model that replaces the California T.
I look for the Portofino to find higher demand than the California T and to hold its resale value (better).
CEO Sergio Marchionne says that Ferrari’s order book is maxed out for the year and into Y 2019, Just the GTC4 Lusso is available “Everything else is pretty well gone,” Mr. Marchionne said on the conference call Wednesday
A strong global economy is also a driving force.
The global economy is heating up. Confidence is high and each region of the world Ferrari sells to saw a Y-Y increase in shipments. In fact, the Americas region was among the lowest performers, contributing growth of just 4%, I remember when Southern California accounted for about 40% of Ferrari’s sales.
|NYSE:RACE||137.08||4 May 2018||6.09||134.92||137.45||134.28||848,658|
|HeffX-LTN Analysis for RACE:||Overall||Short||Intermediate||Long|
|Neutral (0.21)||Bullish (0.25)||Bullish (0.29)||Neutral (0.10)|
Have a terrific weekend.