Ferrari (RACE) receives Old York Operational Quality (AAA) Rating for fiscal year 2025
(AAA) | Consumer Discretionary | Automobile Manufacturers & Luxury
By: Old York Financial
A Private Principal Research Report
the verdict
Old York Financial has assigned Ferrari (RACE) an Operational Quality (AAA) Rating. Ferrari is not a car company; it is a "Monopoly of Desire." In fiscal year 2025, the company generated €7.15 Billion in revenue (+7% YoY) while actually shipping fewer units (13,640) than the prior year. This is the ultimate "Principal's Dream": growing the top line through price and mix rather than volume. It earns a (AAA) because its 29.5% Operating Margin is triple the industry average and its cash conversion exceeds 55%. For the Principal, Ferrari is a fortress of scarcity, where demand is architecturally managed to always exceed supply by exactly one unit.
the old york analysis
owner earnings: the industrial cash pump We evaluate Ferrari’s ability to generate cash while funding the transition to the "Ferrari Luce" (the upcoming EV). Despite heavy R&D, the machine is a cash-generating monster.
2025 Operating Cash Flow: €2.49 Billion (Industrial Activities)
(-) Capital Expenditures: (€950 Million)
(+) Depreciation & Amortization: €660 Million
OLD YORK OWNER EARNINGS: €2.20 Billion
Analyst Note: Ferrari’s Industrial Free Cash Flow of €1.54 Billion is up 50% year-over-year. This is "High-Octane Fuel" for the Principal. The company used this surplus to complete its €2 Billion share buyback program a full year ahead of schedule, proving the machine is over-collateralized with cash.
operational efficiency
ROIC (Return on Invested Capital): 27.1%
ROE (Return on Equity): 41.0%
Net Profit Margin: 22.4%
EBITDA Margin: 38.8% (Industry-defining).
Operating Margin: 29.5% (Up from 28.3% in 2024).
Analyst Note (The Efficiency Apex): An ROE of 41% in a capital-intensive manufacturing business is statistically anomalous. It reflects Ferrari’s "Negative Working Capital" advantage, customers pay significant deposits years before their car is even built. The machine effectively uses its customers' money to fund its own development.
growth & market dominance
2025 Consolidated Revenue: €7.15 Billion.
The Personalization Engine: "Personalizations" (bespoke options) now represent nearly 20% of revenue. This is pure margin with zero incremental manufacturing friction.
Regional Strategy: EMEA and Americas remained strong, while China was "Discipline-Managed" (deliveries down 14% to preserve exclusivity).
The 12Cilindri Factor: The launch of the 12Cilindri and the continued ramp-up of the Purosangue (SUV) provided the "Torque" for the 2025 earnings beat.
the fortress check
Net Industrial Debt: €32 Million (Down from €444M in 2024). Ferrari is now functionally Debt-Free.
Total Available Liquidity: €1.97 Billion.
Capital Allocation: Proposed dividend of €2.99 per share (a significant hike).
Solvency: Absolute. Ferrari’s interest coverage is so high it is no longer a relevant metric. The machine is self-sustaining and bulletproof.
final determination
Rating: Old York Operational Quality (AAA)
Classification: The Sovereign of Speed.
Ferrari is a (AAA) because it has decoupled itself from the economic cycle. Its 27.1% ROIC is the gold standard for any business that touches hardware. In 2025, management proved they could increase profits while deliberately limiting supply, the ultimate hallmark of an elite operational machine.
Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager. This report is for informational purposes only.
