Is Ferrari Stock a Buy?
The effects of the COVID-19 pandemic have slammed most automakers' stocks. With factories closed for weeks, and the post-pandemic economy highly uncertain, investors have been very wary of these capital-intensive, low-margin businesses.
Of course, as in so many things automotive, Ferrari (NYSE: RACE) has been an exception. The world's most storied sports-car maker was trading at a high valuation before the pandemic, and it's trading at a high valuation now.
But is it a buy at that valuation? Or to put the question another way, is Ferrari's valuation justified? And can Ferrari, which has for years limited the production of its jewel-like sports cars to preserve its pricing power, really generate enough profit growth to be of interest to investors?
Source Fool.com
