Nonstop Growth: Ferrari


Expensive luxurious sports cars are always in demand

Ferrari, a $22.7 billion fast and luxurious car maker, recently reported its year-end results.

After launching three supercars: Ferrari Portofino (~$205,000), 812 Superfast (~$335,275), and Ferrari FXX-K Evo (~$2.1 million), Ferrari was able to raise its total car shipments by 4.8% in 2017.

This resulted in revenue rise of 9.5% and a strong 34% increase in profits for the luxurious car maker. Ferrari also delivered gross debt of €1.8 billion and free cash flow of €284 million.

Excluding the recent fiscal year, Ferrari reduced overall financing activities by €884 million and accumulated €1.11 billion in the past three fiscal years.

Ferrari also achieved an adjusted EBITDA of €1 billion two years ahead of its IPO business plan. The car company aims to have €2 billion by 2022, and €1.2 billion industrial free cash flow no later than 2022.

For 2018, Ferrari expects to grow its shipments by 7.2% or more, and for its net revenue to be more than its current fiscal year’s.

At five times its sales market capitalization and now hovering at all-time highs, Ferrari is not definitely cheap. Analysts also have an average price target of $126.35/share (vs. $120.24 at the time of writing).

Disclosure: no shares of Ferrari.

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