Ferrari Stock Worth Buying

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Ferrari Stock Worth Buying

Is Ferrari Stock Worth Buying After EV Launch?

One big news story from the auto sector is the release of Ferrari's new EV. Although it was meant to be a good thing, the market didn't react positively, and the stock price took a dip.

If we look at the YTD performance of Ferrari stock, it is actually in a downtrend. But this does means the Ferrari is now a cheap stock that you can buy for the long term?

Ferrari Has Launched An Electric Vehicle

Many people think that Ferrari has outstepped by launching an electric car. They think it doesn't align with the brand's heritage. Also, the EV design makes it look like a luxury product rather than the traditional Ferrari design.

But the weakness in the Ferrari stock isn't driven entirely by the EV launch. Last year, Ferrari announced that its revenue growth would slow down to 5% for the next 4-5 years. This meant a big change from the double-digit growth that investors had seen in the past.

So, the expectations of slower growth were not taken well by the markets. That's a big reason why the Ferrari stock is still in the red for the year.

Also, there are some concerns about the luxury EVs. In fact, many manufacturers have scaled back their EV programs after seeing weak demand from wealthy buyers.

So, there are real fears that Ferrari is entering a market that doesn't even exist. But we must also remember that Ferrari has a huge market appeal and strong brand presence.

There's a real chance that it could attract wealthy buyers for its new EV. However, it is still too early to see how well the new EV will perform.

If we keep the negatives aside, it is clear that Ferrari stock is too cheap right now. Also, Ferrari is a luxury car maker that is actually profitable. Its operating margin is 30%, which is quite good.

Also, the price tag for Luce EV is $640K. This means the car sales could bring some serious revenue for Ferrari. So for those who want a cheap stock in the auto sector, Ferrari is worth considering.

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