AutoZone and O’Reilly Automotive are often highlighted as top auto-related stocks, each boasting annual gains of around 20% over the past 15 years. However, both are currently viewed as overvalued. An alternative worth considering is Ferrari NV (NYSE: RACE), which has averaged annual gains of 23% over the last decade. Recently priced around $390 per share, Ferrari’s stock has dropped 27% over the past year, presenting a potentially attractive entry point.
Ferrari’s forward-looking price-to-earnings (P/E) ratio stands at 30, significantly lower than its five-year average of 41, while its price-to-sales ratio of 7.2 also trails its historical average. Despite recent revenue growth slowing to 7% year-over-year, the company maintains a robust net profit margin of 21%, driven by its luxury positioning and high-priced models, such as the sold-out F80.
For market professionals, Ferrari’s current valuation may present a compelling buying opportunity, particularly in a sector where premium brands can thrive despite broader economic challenges.
Source: fool.com