Here's my basic overview of Ferrari (RACE):
* High quality brand name with the ability to easily adjust pricing
* Possesses key assets of Formula 1, museums, and exclusive production in Maranello, Italy.
* Limited production of vehicles to maintain prestige of the Ferrari name (\~13700 cars/year, 1+ year waitlist for customers )
* Merchandise and lifestyle business output $2 billion annually (50% of total revenue)
Financials:
* Fairly consistent revenue growth over time (CAGR \~13% over the last 5 years)
* High gross margin for a car manufacturer (\~51%)
* Operating margin maintained at approximately 29%
* Shares outstanding decreasing over time by around 1%/year
* Consistently high return on invested capital (TTM \~40%)
* Free cash flow positive (slowly increasing over time)
Concerns:
Having seen the most recent "Ferrari Luce", I still believe that they have the potential to adapt styling to modern tastes. However, not everyone will want to adopt this new technology, especially if the engine revving sound is either non existent ( or generated using a speaker). There is also a question regarding the role out of hybrid vehicles as I'm not sure this is part of the DNA that Ferrari has been known for.
We also need to look at how they need to have extremely tight controls of supply, otherwise that exclusivity could drop off really quickly.
Conclusion:
Given the recent dip in pricing from the high of $519 USD, I think there could be something here if you believe that the brand moat and overall scarcity of supply can be maintained. The overall numbers for the business seem quiet solid if you believe they can continue their dominance into the future. Only so many companies compete in the high end car market and you can't look at Ferrari through the lens of your typical north American car company like Ford, Dodge.
What does everyone think? What price do you think makes sense?