Ferrari (NYSE:RACE) Outperforming Tesla (NASDAQ:TSLA)
$RACE, $TSLA, $F, $GM
Ferrari (NYSE:RACE) has outperformed Tesla, the hyper growth company, since it went public in October 2015.
Ferrari, celebrating it’s 70 anni this year, has returned 64% while Tesla has returned 46% during that time frame despite the fact Tesla’s revenue growth is expected to average 10X Ferrari’s over then next 4 years.
Ferrari’s slower growing, highly profitable business has been the more undervalued company, higher prospective return company than the faster growing Tesla if it really does grow as many are betting (hoping) it will.
High growth Tesla has garnered a huge amount of attention from the media, consumers and investors over the past four years and continues today. Its stock valuation is the subject of lots of debate but the Bull case is predominantly hinged on the strong growth the company has shown in shipments of its 1st 2 production cars, the Model S and Model X, with great anticipation ahead of the production launch of its more mass market oriented Model 3 series later this year, should that happen as planned.
Notably Elon Musk, Tesla’s hyped up CEO, now traveling with Hollywood movie personality Amanda Heard in Australia where her latest film is in production. Who is minding the store of this highly speculative company that has never made a profit ever.
Ferrari has outperformed newcomer EV maker Tesla since it went public in October 2015.
Ferrari stock has returned 64% while Tesla has returned 46% during that time frame despite the fact that Tesla’s revenue growth expectations are much higher.
Ferrari stock is up 105.6% since July of 2016
Shares of Ford (NYSE:F) and GM (NYSE:GM) might be falling because of an uncertain outlook for car sales, but the stock of luxury sports carmaker Ferrari is racing ahead. The stock has 2X’d in value over the past year as its profitability has improved and sales of its Supercars, HyperSupercars, and SE cars cannot meet world wide demand.
Ferrari’s target consumer and its Corso Clienti have much, much higher level of disposable income than Tesla’s, and the economic uncertainty that may affect sales of more mundane vehicles from its rivals does not hurt it. That allows Ferrari to mark profit margins well in excess of the auto industry.
Further, Ferrari is the premier racing team in Formula One, the world #1 motorsport.
Ferrari will never become a me-too car.
The company trades as a Luxury good maker at 36X earnings and more than 4.5X sales, Ferrari’s stock is sporting a premium for a carmaker but there is scope as a Luxury goods maker and it makes money.
Tesla does not have that luxury.
|NYSE:RACE||85.51||30 May 2017||0.01||85.27||85.76||85.2||189,334|
|HeffX-LTN Analysis for RACE:||Overall||Short||Intermediate||Long|
|Very Bullish (0.59)||Bullish (0.44)||Very Bullish (0.62)||Very Bullish (0.71)|
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