Q4/FY 2025 - Ferrari
Outpacing initial internal EBIT guidance by c. 6% in FY25 (at constant FX)
Today, Ferrari released its Q4 and FY2025 results. As had been the case for most of the 2025 events, the share price reaction was quite substantial. To witness these double-digit percent moves is actually a bit of worry (or at least, it’s remarkable given the relatively modest change in longer-term expectations, more on that below). The stock closed up 10% (after being up as much as 12%).
Commenting on the results, CEO Vigna thanked all Ferrari employees:
To reward their achievements, and as a direct reflection of the company’s performance, a strong alignment with its people, I’m pleased to announce the yearly competitive award of up to EUR 14,900 for all- for our employees in Italy. The solidity of our business is underpinned by demand dynamics and the visibility we have.
In terms of financial performance, Ferrari exceeded its own guidance quite widely considering the puts and takes on FX, tariffs, and the rather significant model shake-up.
Last quarter, we wrote:
What should have been the toughest quarter turned out to be solid with better price/mix and EBITDA growing at 7% (constant FX). EBIT benefited from the phase-out of several models.
Doing the math, Q4 guidance implies +0.8% YoY EBITDA growth. Once again, Ferrari’s well on track to exceed its own guide. This is consistent with the comments we’ve made so far this year, irrespective of how the share price has moved around (quite a wide range to say the least). The stock’s been far more volatile than what the underlying performance and outlook (which got completely sandbagged in our view) would tell you.
In a nutshell, what the Q4 and full-year report highlights:
For an outsider, it’s quite difficult to forecast Ferrari’s growth and margin profile in any given quarter. During the Q2 call, CFO Piccon shared the honest and rhetorical statement: I don’t know how analysts are making their quarterly models…
The management team sticks to “floor” assumptions - not making any promises they cannot achieve (rather than blaming the macro for such potential underperformance). In 2025, it led to harsh multiple contraction/reset in investor expectations regarding the 2030 outlook. As we mentioned already, the EPS outlook does not reflect buybacks (even though there’s a 3.5 billion EUR program running today), does not reflect pricing adjustments due to adverse FX trends, and it does not include a continued outperformance for personalizations. When reflecting buybacks and FX, the math works out to be a 9.5-ish percent CAGR in EPS.
The growing FCFs and the active share repurchase program (running at 750m to 1 billion EUR per annum) reward the patient investors. That’s when longevity compounds value over time but that does not mean the share price journey will be linear.
So with that, let’s take a closer look at the numbers, the stock’s volatility, and how it all translates into a valuation model that strips out the noise.