1Sem.·

Porsche vs Ferrari 🏎️

I could not avoid the comparison between these two stocks, both work in the same sector and more or less the same category of Luxury in a way, although certain Porsche models are much more affordable than the cheaper Ferrari ones, but cases apart:

Ferrari
$RACE (-1,37 %)

47 Times Current Earnings
2.5 B of Ebitda for a Valuation of 72B
0.8% Annual Dividend
Last 5 Years +108%.

Porsche
$P911 (-3,76 %)

11 Times Actual Earnings
38B of Ebitda for a Valuation of 48B
4.4% Annual Dividend
Last 5 years -37%.

I personally am not very attracted to the automotive sector for investment, a lot of uncertainty, regulation and competition in recent years, very few companies have been able to beat the market 📈

Maybe this valuation is just a long term expectation thing, or maybe it is Ferrari that is overvalued and Porsche is exactly where it should be or maybe it is a good value investment opportunity in Porsche....

For my part I am going for European Stocks to diversify my exposure to the US market and in turn to the dollar, most companies are either very expensive in fundamental and technical valuation (historical highs) or include a lot of risk (lots of debt, haven't reported profits yet) or are so cheap that beating the market seems mission impossible (very low PE sectors like automotive) 🫠

Anyway we will have to do a little more research, maybe it is not a bad idea to invest in. $P911 (-3,76 %)? 🤔

4 Commentaires

Pascal@Hydrogenium

1Sem.

Yes, both companies produce cars that are in the luxury realm, but they have quite different business models. This can be seen quite well in their output: Porsche ~300.000 cars 2024, Ferrari ~13.500. Ferraris Cars are not as mass produced. Ferrari is much closer to Hermes than it is other car manufacturers. In my opinion, Ferrari deserves a rather premium valuation due to its business model (currently a bit to high)

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TheMaverick@TheMaverick

1Sem.

Porsche is like Louis Vuitton, Ferrari is like Hermes.
They are both in the luxury sector, but Ferrari and Hermes are luxury²

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Andreas@Edmund

1Sem.

Interesting discussion!

I’d like to add one key performance indicator. The EBIT margin (2023) of both companies is higher than that of their competitors:

Ferrari 27% (top 1 for car producers)

Porsche 18% (top 2)

The high margins are not only driven by expensive cars but by merchandising income and - in the case of Ferrari - by income from Formula One.

Another positive factor for Porsche is their stake in Rimac. They produce very expensive electric sports cars (in the price range of Ferraris. On top it should give Porsche access to their (Rimac’s) know how of developing super performance electric cars.

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Alfredo Arcos Alegría@Alfre2

1Sem.

@TheMaverick @Hydrogenium I currently agree with both, it’s a good comparison

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