Ferrari Slows Down, Q3 Shipment Drop Hits the Brakes On Stock Growth

Ferrari N.V. RACE stock declined after the company reported its third-quarter print and guidance.

The company reported fiscal third-quarter 2024 sales growth of 6.5% year-on-year to 1.644 billion euros, beating the analyst consensus estimate of 1.639 billion euros.

Adjusted EPS of 2.08 euros beat the consensus estimate of 1.99 euros.

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Revenue from cars and spare parts rose 5.2% year over year, and Sponsorship, commercial, and brand revenues increased by 20.4%. Total shipments declined by 2% year over year to 3,383 units.

Adjusted EBITDA rose 7% Y/Y to 638 million euros, and the margin expanded 20 basis points Y/Y to 38.8%.

Adjusted net profit for the quarter increased 13% to 375 million euros.

Operating cash flow totaled 587 million euros with a 338 million euros free cash flow.

As of September, the company's net industrial debt was 246 million euros, compared to 441 million euros at the end of June.

Ferrari held 1.53 billion euros in cash and equivalents as of September.

Ferrari's third-quarter results reflect strong growth, driven by a diverse product mix and increased customization, according to CEO Benedetto Vigna. He highlighted Ferrari's adherence to 2022 Capital Markets Day commitments, including sustained order visibility through 2026, ongoing product and process innovation, and progress toward carbon neutrality with the early shutdown of Maranello's gas-fueled plant.

Outlook: Ferrari expects fiscal 2024 net revenues to be greater than 6.55 billion euros (prior >€6.4 billion) against an estimate of 6.65 billion euros.

The company expects fiscal 2024 adjusted EPS of greater than or equal to 7.90 euros (prior greater than 7.50 euros) versus an estimate of 8.15 euros. Adjusted EBITDA of greater than 2.50 billion euros (prior 2.45 billion euros) with a margin of greater than 38%.

Ferrari stock gained 41% year-to-date, but fell 7% after the earnings print.

Price Action: RACE stock is down 7.09% at $442.32 at the last check on Tuesday.

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