Down 29% in 6 Months, Is Ferrari Stock a Buy?

Key Points
Ferrari's top line grew 8% on a constant-currency basis in 2025.
The company's recent five-year financial targets imply a sluggish 5% annualized revenue growth rate.
With a multi-year order book and a massive share repurchase program, the stock remains an attractive, durable investment.
- 10 stocks we like better than Ferrari ›
Shares of Ferrari (NYSE: RACE) have hit a rough patch.
The stock is down significantly from its 52-week high and has fallen about 29% over the last six months. A drop like this is highly unusual for the iconic Italian luxury automaker, which has historically traded with the stability of a high-end collectible rather than a cyclical car company.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
But the pullback arguably makes sense. Late last year, the market was spooked by management's updated five-year financial targets presented during its Capital Markets Day, which implied a significant deceleration in the company's top-line growth rate.
With that said, the underlying business is still performing exceptionally well. And with a major new supercar rollout underway, is this rare pullback a buying opportunity?
A conservative roadmap
To understand the stock's recent weakness, look no further than the company's 2030 financial targets.
At its Capital Markets Day last October, management expects net revenue to reach approximately 9.0 billion euros by the end of the decade. Compare that to the 7.15 billion euros in revenue the company generated in 2025, and this implies a compound annual growth rate of just 5% over the next five years.
That is a noticeable step down from the double-digit growth rates investors have grown accustomed to in recent years.
But there is a good reason for this cautious approach. Ferrari's entire business model relies on scarcity. By intentionally capping volume to protect its pricing power, the company ensures its brand equity remains pristine.
And the fruits of this discipline are clearly reflected in the company's profitability. In 2025, Ferrari's operating margin -- or its operating profit as a percentage of total revenue -- expanded by 120 basis points year over year to a staggering 29.5%.
For Ferrari, margin expansion like this means earnings per share is growing faster than revenue -- a trend I think should persist for the company over the long haul.
Even more, Ferrari produced over 1.5 billion euros in industrial free cash flow last year. Compare that to the roughly 1.0 billion euros it generated in the prior year, and that represents a massive 50% year-over-year increase.
The F80 catalyst
While the five-year headline growth rate may seem uninspiring, the near-term product pipeline is packed with high-margin catalysts.
The most important of these is the newly launched F80 supercar. Deliveries of the highly anticipated hybrid flagship commenced late last year and should ramp up throughout 2026. As these ultra-expensive, multi-million-dollar vehicles roll out of Maranello and onto the income statement throughout the year, they should provide a robust tailwind to both revenue and earnings.
Capturing the unique predictability of Ferrari's business model, the company has pre-sold all of its F80 units.
In fact, the company's overall order book for its cars "extends toward the end of 2027," said Ferrari CEO Benedetto Vigna during the company's fourth-quarter earnings call.
Time to buy?
Even after the recent haircut, Ferrari stock is not cheap. As of this writing, shares trade at about 33 times earnings.
At this valuation, the market is still pricing in near-flawless execution.
Additionally, because of this rich premium and management's modest 5% annualized growth target, investors probably shouldn't expect the stock to deliver market-crushing returns from here.
Of course, that doesn't mean the stock isn't worth buying. Ferrari offers a unique combination of extreme brand loyalty, a multi-year order book, and a customer base that is highly resilient to recessions.
Further, the company is actively boosting its total shareholder yield. Earlier this year, the company said it would increase its dividend by 21%. In addition, Ferrari is executing a meaningful 3.5 billion euro share repurchase program that will run through 2030. By reducing the overall share count, this buyback should help drive earnings per share higher even if top-line growth is modest.
Returns may not be exceptional over the next five years. But I believe Ferrari offers investors a decent way to diversify a portfolio beyond traditional technology stocks.
For investors looking to secure a potentially solid long-term return and a growing stream of dividend income, I think this dip is a great place to start building a position.
Should you buy stock in Ferrari right now?
Before you buy stock in Ferrari, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ferrari wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $508,877!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,115,328!*
Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 189% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of March 18, 2026.
Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ferrari. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.