Is Today's RACE Dip a Buying Opportunity?

If you know me at all, you know I’m a car guy. So it’s no surprise I was paying close attention this morning to see how one of my favorite car companies, Ferrari NV (RACE), performed in the third quarter. In today’s blog, we’ll take a look at these results and see what Ferrari has to offer investors going forward.

Ferrari was founded by Enzo Ferrari, who was devoted to motor racing. The company developed and built its first sports car back in the late 1940s. Today, Ferrari offers seven vehicle models, including four sports cars and three GT cars.

RACE posted a solid third-quarter earnings and sales report prior to the opening bell today. The company noted shipments increased 3.4% year-over-year to 2,046 vehicles. Revenue rose 6.8% year-over-year to 836 million euros, or $973.9 million. Adjusted net profit rose 25% to 141 million euros, ($164 million). Adjusted earnings per share climbed 25.4% year-over-year to 0.74 euros, or $0.84.

The analyst community was looking for earnings of $0.79 per share on $964.91 million in sales, so Ferrari topped earnings estimates by 11.9% and posted a slight sales surprise.

The company has raised its full-year 2017 sales outlook, expecting net revenues of 3.4 billion euros ($3.96 billion), up from the previous outlook of 3.3 billion euros ($3.84 billion). Ferrari reaffirmed their previous outlook for shipments, at about 8,400 vehicles. Additionally, Ferrari now expects adjusted EBITDA of 1 billion euros ($1.16 billion), which is up from 950 million euros ($1.11 billion).

Despite the good results, RACE shares went down about 2% this morning. However, RACE is a strong stock, and this dip is merely a bit of profit taking. That’s precisely why RACE maintains an A-rating in my Portfolio Grader tool today.

All in all, I think today’s dip in RACE’s share price is an excellent buying opportunity. However, to discover the exclusive Buy Below prices for all my favorite stocks, I urge you to join Blue Chip Growth today. But if you aren’t ready to join Blue Chip Growth yet, stay tuned into this blog. We’ll continue exploring some of my favorite stocks throughout earnings season.


Louis Navellier

Louis Navellier

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