Core Viewpoint - Ferrari's high valuation may seem excessive at first, but its unique business model and financial performance justify the premium, positioning it more like a luxury brand than a traditional automaker [1][2][12]. Financial Metrics - Ferrari's P/E ratio stands at 41, with an EV/EBITDA multiple near 29 and a price-to-sales ratio above 11, which are significantly higher than traditional automakers [2][3]. - The company boasts an adjusted EBITDA margin of 38.3%, an operating margin of 28.3%, and a gross margin close to 50% for 2024, aligning it more with luxury brands like LVMH and Hermès [3][4]. Revenue Streams - Approximately 15% of Ferrari's revenue is derived from sponsorships, licensing, financial services, and after-sales, contributing to predictable cash flow and stability [6][7]. - The return on invested capital (ROIC) is around 24%, which is double that of LVMH, indicating strong financial health [8]. Business Model - Ferrari operates on a scarcity-driven model, producing fewer cars than demand, which maintains multiyear waiting lists and rising resale values, thus preserving pricing power [9]. - The company focuses on reinvesting in innovation and returning capital to shareholders without pursuing scale, allowing it to maintain its luxury status [9][12]. Market Position - Despite being valued at 42 times earnings, Ferrari's unique characteristics and brand durability suggest that it is not a conventional company, and its premium may be justified [10][12]. - The brand's emotional appeal insulates it from economic downturns, keeping demand stable even during weaker macroeconomic conditions [6][12]. Future Outlook - If Ferrari successfully blends scarcity with innovation, its elevated valuation could remain sustainable over the long term [13].

Core Insights - LVMH's shares surged over 14% following a quarterly earnings report that showed sales growth for the first time this year, primarily driven by increased demand in China [1][2] - Bernard Arnault's net worth increased by more than $19 billion, reaching $181.8 billion, making him the seventh richest person globally [3] Financial Performance - LVMH reported third-quarter sales of €18.28 billion ($21.25 billion), a 1% year-over-year increase, surpassing analyst expectations [2] - The "selective retailing" unit, which includes Sephora, experienced the strongest growth at 7%, while Wines & Spirits, Perfumes & Cosmetics, and Watches & Jewelry reported growth rates of 1%, 2%, and 2% respectively [2] Market Position - Following the stock surge, LVMH's market capitalization reached €304.89 billion, making it Europe's second most valuable company and the world's leading luxury brand, surpassing Hermès [4] Regional Insights - Sales in Europe and the U.S. remained stable year-over-year, while Japan saw a decline; however, sales in the rest of Asia, particularly in mainland China, showed significant improvement [5]