Investors that want to put money to work in the automotive sector might consider <\/span>Tesla<\/span><\/strong>, given that it’s an innovative and tech-driven force. Or perhaps a more traditional name, like <\/span>Ford Motor Company<\/span><\/strong>, comes to mind. <\/span><\/p>\n There’s another <\/span>auto stock<\/span><\/a>, which is trading 28% below its peak (as of Feb. 17), that is more deserving of investors’ capital right now. It has still produced a monster 952% gain over the past decade.<\/span><\/p>\n It’s time to buy the dip, as this business could beat the <\/span>S&P 500<\/span><\/strong> index over the next five years. <\/span><\/p>\n Image source: Getty Images.<\/p>\n<\/div>\n Ferrari<\/strong> (RACE<\/a> +0.12%<\/span>)<\/span> operates a unique business model. Yes, it sells vehicles to consumers across the globe. It’s an ultra-exclusive luxury brand, too. This means that its financial performance stands out in the industry.<\/span><\/p>\n In 2025, Ferrari posted a year-over-year revenue gain of 7%. It sold just 13,640 cars during the 12-month period, which is a tiny figure that highlights management’s objective of capping volume in order to maintain brand strength. These figures on their own aren’t driving excitement among the investment community.<\/span><\/p>\n However, the company reported an operating margin of 29.5% last year, which is unheard of among its peer group. And its free cash flow soared 50% in 2025. <\/span><\/p>\n Those profitability metrics are strong because Ferrari benefits from incredible pricing power. It just introduced its <\/span>first ever electric vehicle<\/span><\/a> (EV), the Luce, which <\/span>Car and Driver<\/span><\/em> expects will have a starting price tag of around $500,000. Despite these high prices, Ferrari’s order book is full toward the end of 2027.<\/span> Owning one of these machines is a status symbol.<\/p>\n Today’s Change<\/p>\n (0.12%) $0.43<\/p>\n Current Price<\/p>\n $366.93<\/p>\n<\/div>\n<\/div>\n<\/div>\n Market Cap<\/p>\n $65B<\/p>\n Day’s Range<\/p>\n $361.14 – $368.02<\/p>\n 52wk Range<\/p>\n $328.00 – $519.10<\/p>\n Volume<\/p>\n 22K<\/p>\n Avg Vol<\/p>\n 744K<\/p>\n Gross Margin<\/p>\n 51.93%<\/p>\n Dividend Yield<\/p>\n 0.92%<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n In the past three years, Ferrari’s diluted earnings per share climbed at a compound annual rate of 20.7%. This was despite the lingering effects of the pandemic and supply chain issues rattling the industry. I believe it’s totally reasonable to expect a high-teens level of growth over the next half-decade. <\/span><\/p>\n Demand isn’t cyclical, which provides a high floor for financial results. Ferrari’s target customer is extremely wealthy, so they’re less impacted by economic forces.<\/span><\/p>\n There’s also added upside since the stock is trading substantially below its record. Shares go for a price-to-earnings ratio of 37.1. In the past five years, the valuation was cheaper on very few occasions. <\/span><\/p>\n The issue with Tesla is that its core business of selling EVs is struggling. And its valuation is sky-high. The problem with Ford is that it’s a low-growth and low-profit company. <\/span><\/p>\n Ferrari stands out, and it presents prospective investors with an attractive buying opportunity.<\/span><\/p>\n<\/div>\n <\/a><\/strong> <\/a><\/p>\n","protected":false},"excerpt":{"rendered":" … money to work in the automotive<\/span> sector might consider Tesla, given …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-98690","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/98690","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/comments?post=98690"}],"version-history":[{"count":0,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/98690\/revisions"}],"wp:attachment":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/media?parent=98690"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/categories?post=98690"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/tags?post=98690"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/p>\n
Straddling the line between car company and luxury brand<\/span><\/h2>\n
<\/div>\n<\/div>\n
Key Data Points<\/h3>\n
Earnings growth will drive returns in the years ahead<\/span><\/h2>\n