Ferrari may be over-valued

Ferrari 458 Spider first official photos
Ferrari 458 Spider first official photos

Recent valuation puts Ferrari at 4.5 billion euros while Fiat as a whole is worth just 5.3 billion euros

Every few months the rumors resurface that Fiat is considering an IPO for Ferrari to raise some cash.

An IPO would take Ferrari public as a separate entity from Fiat Group and would allow Fiat to sell-off part of the luxury automaker to raise money while still holding a controlling interest in the brand. But how much is Ferrari worth?

According to a report, Ferrari has been valued at €4.5 billion - about 1.8 times the combined yearly revenues of the Ferrari and Maserati brands (Maserati belongs to Ferrari) which is estimated to be €2.6 billion for 2011. Sounds reasonable enough, no?

But some industry observers think that is a little high. Credit Suisse analyst David Arnold says that, using the same 1.8 figure, BMW shares should be selling at €230 instead of the €57 they are currently valued at on the stock market.

Fiat Group itself, which now also owns Chrysler, is only worth €5.3 billion as a whole.

But market or analyst valuations vs. yearly revenues often vary wildly. Just have a look at technology stocks to see how crazy that game can get. For example, as recently as last May, Twitter's market valuation (the sum of all it shares multiplied by the stock price) was over 50 times its yearly revenues.

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Comments (13)

sensei sensei
Ferrari is a cash drain on FIAT not a major part of its operational income. Ferrari has alway been overvalued in every area except for marketing.
Sep 9th, 2011 4:59pm
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radmeister radmeister
Who uses revenue as an evaluation figure? I mean you would have to be a complete moron, doesn't account for operating costs, debt, and taxes..They need to go 1.8x net PROFIT for a proper valuation, which on top of that in order to make the stock worth purchasing they need to subtract the expected growth % for next year. If you take Maserati+Ferrari and take their profit for last year + assets you are at roughly 1.1billion euro. With a growth of 7.9% in 2010 you'd want to value it at 1.83billion euros to make the stock desirable..BUT considering Maserati is going very downhill with their current(5-10 year old) line up and Chryslerfication their valuation wouldn't be very high. The way things are going i don't think any investor sees that stock going up any time soon. The stock market these days is all about speculation anyways, the car industry isn't speculative enough to attract too many investors. Technology on the other hand is going like hot cakes..I personally think they valuate themselves about 2x what they are worth and should consider other means before selling their bread maker off.
Sep 6th, 2011 5:14pm
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charlemagne charlemagne
Fabbrica Italino Automobilo Turino (which means Italian Automobile Factory of Turin)- FIAT. So we talking Italian job here...got it?
Sep 6th, 2011 1:39pm
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golddaytona golddaytona
if ferrari goes public, they will lose the control to shareholders and will be pressured to build 10 times more capacity to shorten its waiting list and launch more models and make more sales.. that's all the investors care about.. short-term gain.. no one cares whether this will be good for the long term or whatever.. we will see ferrari suv, coupe, sedan or whatever in no time..
Sep 6th, 2011 9:44am
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catchmyshadow catchmyshadow
Ferrari are past it. i mean when was the last time they won an important race or series? i mean even Audi is better in racing these days.
Sep 6th, 2011 3:26am
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swifthead swifthead
Ferrari....just a name...same cars without that badge are just some italian small time manufacturer compared maybe only to Spyker and that kind of name :P
Sep 5th, 2011 7:01pm
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MasterA MasterA
50+ years of developing F1 technology = small time manufacturer? If that was the case, Spyker must have 16 world championships, right?
Sep 5th, 2011 11:10pm
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M! M!
wow. that's a very idiotic comment, comparing ferrari to spyker. +1 on mastera's comment.
Sep 6th, 2011 3:10am
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Well... beside Ferrari, is there something else worth any penny from Fiat? Nope.
Sep 5th, 2011 6:58pm
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pismeov pismeov
Sep 5th, 2011 7:57pm
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benz_man benz_man
The name "Ferrari" alone has so much brand cache...cause they don't build Cayenne's.
Sep 5th, 2011 6:24pm
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nederinaa nederinaa
Or Cygnets
Sep 5th, 2011 6:53pm
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swifthead swifthead
Ferrari is really over-priced and nowhere near tha value! Ferrari is worthless compared to the Fiat...without it, ferrari would be somwhere in history now!
Sep 5th, 2011 5:31pm
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