TIVP035: Ferrari (RACE): High-Speed Compounder w/ Shawn O’Malley & Daniel Mahncke
The Intrinsic Value Podcast - The Investor’s Podcast Network
Intro
This chapter examines Ferrari's outstanding financial performance and brand strength in the luxury car market. It delves into their pricing strategy and growth potential, contrasting their success with other luxury brands while analyzing future investment opportunities.
Shawn O’Malley and Daniel Mahncke break down Ferrari (ticker: RACE), a company whose stock is arguably just as impressive as its high-performance and ultra-luxury vehicles. By global automotive standards, Ferrari hardly has any sales volumes, selling about 14,000 cars a year, yet these vehicles come with such premium price tags that the company can reasonably command a $90 billion market valuation still.
IN THIS EPISODE, YOU’LL LEARN
00:00 – Intro 09:27 - Why Ferrari obsesses over keeping supply below demand. 11:45 - Why Ferrari is more like Hérmes than Porsche. 16:27 - Ferrari’s response to the hybrid and EV movements. 30:35 - What makes Ferrari special amongst even other ultra-luxury vehicle makers. 33:53 - What it actually takes to buy a Ferrari, and how Ferrari chooses its customers. 42:40 - How Ferrari has created a long-term ownership culture amongst its clients, similar to the mindset among shareholders of Berkshire Hathaway. 48:05 - How to think about modeling RACE’s intrinsic value. 57:45 - The creative ways Ferrari has leveraged its IP to sell cars at higher and higher prices. 01:04:28 - Whether Shawn and Daniel add RACE to their Intrinsic Value Portfolio.
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.
- Sign Up for The Intrinsic Value Community.
- Quartr Edge’s breakdown of Ferrari.
- Business Breakdowns’ podcast on Ferrari.
- Related episode: TIP711: Netflix, Ferrari, & Managing Market Volatility w/ Arif Karim.
- Guy Spier on Ferrari.
- K500 Classic Car Index.
- Explore our previous Intrinsic Value breakdowns: Uber, Nike, Reddit, Nintendo, Airbnb, AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports.
- Check out the books mentioned in the podcast here.
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