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Ferrari N.V. (RACE) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Ferrari N.V. (RACE)

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Intrinsic Value (DCF)

Current$354.57
→
Intrinsic$143.32
-60%
$93.02$143.32$243.35
Current price reflects execution expectations above 18% growth — not unreasonable for quality businesses.
Range: Bear $93 → Bull $243. Current price implies expectations above the base case, closer to bull expectations.
Current price reflects assumptions at the upper end of our valuation range (bull case: $243).
Discount ↓Growth →14%16%18%20%
8%$182$198$215$234
10%$121$132$143$156
12%$89$97$105$114
14%$69$76$82$89

Bull Case

  • Bull case ($243) with 22% growth, 8% discount rate

Bear Case

  • Bear case ($93) implies 74% downside at 14% growth, 12% discount
  • Trading 60% above base case — execution must exceed assumptions to justify
  • Price exceeds bull case ($243) — requires exceptional execution
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5-Year Free Cash Flow Projection

Year 1$1.11B
Year 2$1.30B
Year 3$1.54B
Year 4$1.81B
Year 5$2.14B
Terminal$33.88B

📐 Model Inputs

Growth Rate17.9%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$937.50MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is RACE stock undervalued or overvalued?
🔴 OVERVALUED

RACE trades at $354.57 vs. our DCF-derived intrinsic value of $143.32, implying -61% downside. Using a 9.5% WACC and 17.9% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($222.08) suggests limited upside.

What is RACE's intrinsic value?

Using a 5-year DCF model: Base FCF of $938M, projected at 17.9% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.61B net debt and dividing by 0.18B shares: Bear $90.73 | Base $143.32 | Bull $222.08. Current price $354.57 implies -61% to base case.

How is RACE's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 17.9% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($27.41B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.2x.