Shawn O’Malley and Daniel Mahncke break down Ferrari (ticker: RACE), a company whose stock is arguably just as impressive as its high-performance and ultra-luxury vehicles. By global automotive standards, Ferrari hardly has any sales volumes, selling about 14,000 cars a year, yet these vehicles come with such premium price tags that the company can reasonably command a $90 billion market valuation still.
IN THIS EPISODE, YOU’LL LEARN
00:00 – Intro
09:27 - Why Ferrari obsesses over keeping supply below demand.
11:45 - Why Ferrari is more like Hérmes than Porsche.
16:27 - Ferrari’s response to the hybrid and EV movements.
30:35 - What makes Ferrari special amongst even other ultra-luxury vehicle makers.
33:53 - What it actually takes to buy a Ferrari, and how Ferrari chooses its customers.
42:40 - How Ferrari has created a long-term ownership culture amongst its clients, similar to the mindset among shareholders of Berkshire Hathaway.
48:05 - How to think about modeling RACE’s intrinsic value.
57:45 - The creative ways Ferrari has leveraged its IP to sell cars at higher and higher prices.
01:04:28 - Whether Shawn and Daniel add RACE to their Intrinsic Value Portfolio.
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
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Quartr Edge’s breakdown of Ferrari.
Business Breakdowns’ podcast on Ferrari.
Related episode: TIP711: Netflix, Ferrari, & Managing Market Volatility w/ Arif Karim.
Guy Spier on Ferrari.
K500 Classic Car Index.
Explore our previous Intrinsic Value breakdowns: Uber, Nike, Reddit, Nintendo, Airbnb, AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports.
Check out the books mentioned in the podcast here.
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