Compare Tesla, Inc. (TSLA) vs Ferrari N.V. (RACE) Stock

Ferrari N.V. (RACE) offers the better valuation at 35.9x trailing P/E (33.7x forward), making it the more compelling value choice. Analysts rate Ferrari N.V. (RACE) a "Buy" — based on 19 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Ferrari N.V. (RACE) is the cheapest at 35.9x versus Tesla, Inc. at 372.7x. On forward P/E, Ferrari N.V. is actually cheaper at 33.7x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Ferrari N.V. wins at 1.51x versus Tesla, Inc.'s 5.23x — a reasonable growth-adjusted valuation.

Over the past 5 years, Ferrari N.V. (RACE) delivered a total return of +97.5%, compared to +68.1% for Tesla, Inc. (TSLA). A $10,000 investment in RACE five years ago would be worth approximately $20K today (assuming dividends reinvested). Over 10 years, the gap is even starker: TSLA returned +30.4% versus RACE's +939.8%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Ferrari N.V. (RACE) is the lower-risk stock at 0.65β versus Tesla, Inc.'s 2.16β — meaning TSLA is approximately 231% more volatile than RACE relative to the S&P 500.

Ferrari N.V. (RACE) is the more profitable company, earning 22.4% net margin versus 4.0% for Tesla, Inc. — meaning it keeps 22.4% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: RACE leads at 29.5% versus 4.6% for TSLA. At the gross margin level — before operating expenses — RACE leads at 51.7%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Ferrari N.V. (RACE) is the more undervalued stock at a PEG of 1.51x versus Tesla, Inc.'s 5.23x. Both stocks trade at elevated growth-adjusted valuations, so expected growth needs to materialise. On forward earnings alone, Ferrari N.V. (RACE) trades at 33.7x forward P/E versus 202.8x for Tesla, Inc. — 169.1x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for RACE: 24.5% to $472.85.

None of the stocks in this comparison currently pay a material dividend. All are effectively zero-yield and should be held for capital appreciation rather than income.

For long-horizon retirement investors, Ferrari N.V. (RACE) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.65), +939.8% 10Y return). Tesla, Inc. (TSLA) carries a higher beta of 2.16 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (RACE: +939.8%, TSLA: +30.4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Consumer Cyclical sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.