Pythia Cap
Equity Investing & Market Satire
Ferrari remains expensive because bulls ignored its capitalized R&D, overstating free cash flow. At the peak the stock traded near a 1% FCF yield, and dividends plus buybacks only ever covered about half the quoted FCF, leaving some €400M unexplained. Even at about 25x FCF it would be only cheap-ish when TransDigm or Moody's, growing 6-8% for years, trade at 25-30x, and Ferrari is still materially above that despite a 43% drawdown, its largest ever, per @Fiscal_ai. x.com x.com x.com
Ferrari is overvalued for such low growth. x.com
Ferrari is less attractive to own now because its Luce numbers look increasingly underwhelming and prices are already being cut. The company and brand remain appealing, but the money could work better elsewhere. x.com
Ferrari got cheaper while its moat got deeper, which could make it an excellent pick for a 10-year-plus horizon. Its multiple fell from 60x in 2020 to 30x even as EBITDA margin rose from 29% to 40%, ROE reached 42% and its quality score hit 98/100, the best in global autos. The derating reflects expected revenue growth of about 6% a year through 2028, half the historical pace, because management deliberately capped volume to protect scarcity, leaving only price increases to drive growth. x.com
Coca-Cola's safe-haven premium has gone too far. It trades at more than double Ferrari's price-to-free-cash-flow multiple while having the same EBITDA margins and nearly half the expected growth rate. x.com
Ferrari's long-awaited electric car exposes a broken pricing model that ignores the EV industry's deeper issues: it costs $640,000, while Xiaomi and Tesla sell EVs for about $38,000, and Tesla has also solved full self-driving. The stock's 7% drop on the launch is justified. x.com
Ferrari's 41% drop from its high looks out of line with its fundamentals: net margin only slipped from 23% to 21%, and it is a beautiful company trading at a P/E barely above the market's. A fall this large should reflect fundamentals rather than technicals, beyond the broad market decline, so either the selloff is overdone or something is being missed. x.com x.com
Ferrari deserves to fall more than 10 points premarket after unveiling what is probably the ugliest car it has made, at an insane price. Repliers in the thread add that a Tesla Plaid costs a fraction of the price and that someone should be fired for allowing the design. x.com x.com x.com
Moody's is one of the stocks worth owning, ninth on a running list of favored picks. x.com
Ferrari is a compounder with a premium brand, elite margins, scarcity and pricing power, and its EPS is expected to nearly double by 2028. The chart has built a six-month Stage 1 base, reclaimed the 200-day moving average and is knocking on breakout levels. Per @TLAMB91, large dark pool prints and supportive options flow have shown up lately. x.com x.com
FICO still looks like one of the best opportunities right now, based on estimated EPS growth of 18% a year and a terminal P/E of 25. x.com
