Many investors aspire to purchase shares of Ferrari (RACE) because of its iconic F1 team and high-end sports automobiles.

So, as the latest Formula One season begins and it leads Tesla (TSLA) in a crucial category, is Ferrari stock a buy?

Continue reading to find out.

Many investors prefer to buy equities with some cachet, and few brands are more synonymous with luxury than Ferrari.

With a new Ferrari SF90 Stradale costing upwards of $500,000 and a 2023 Ferrari 812 GTS costing more than $400,000, RACE stock is significantly more reasonable for the typical American eager to brag about owning a Ferrari.

F1 Season Approaches; Charles Leclerc Upbeat

Fiat Chrysler, which is now a subsidiary of Stellantis (STLA), spun off Ferrari in 2016.

It is well-known for its sports vehicles, but it is also the oldest and most successful Formula One team.

Ferrari’s status as probably the best company in motorsport lends it a distinct cachet, particularly among high-rollers.

The Scuderia Ferrari team has won 16 F1 constructors’ and 15 drivers’ championships, gaining even more followers in the process.

Michael Schumacher, Sebastian Vettel, Alberto Ascari, and Juan Manuel Fangio are among the team’s legendary drivers.

The company has been in a slump for some time, owing in part to the recent dominance of fellow automaker Mercedes. Red Bull Racing, long a toy for the fizzy drink company’s founder Dietrich Mateschitz, has been the team to beat in recent seasons.

This is owing in part to their outstanding lead driver, Max Verstappen, but probably even more to Chief Technical Officer Adrian Newey.

Scuderia Ferrari has responded by firing Team Principal Mattia Binotto and replacing him with Frédéric Vasseur from France.

Charles Leclerc, the team’s primary driver, is highly regarded.

At the team’s vehicle launch event in February, he promised to end Ferrari’s 16-year world championship drought.

“The goal is to triumph. I’m excited to get back behind the wheel and compete for the championship. Last year was a significant stride forward” Leclerc explained. “We must do the same this year in order to win the championship. That is the goal for the team and for me as well: to win more races and to be more consistent from the outset to the last.“

F1 teams have completed pre-season testing on their most recent vehicles. Ferrari finished at the top of the time sheets, but Red Bull seemed to have the upper hand.

“The pace will go up once we are ready to bring everything together. And when we are not, the speed slows” Vasseur explained.

The Bahrain Grand Prix will kick off the 2023 Formula One season on March 5.

RACE Outperforms Tesla Stock

The stock has shaped itself into a long cup with a handle.

The optimal entry point is 270.45. Its relative strength line has recently reached new highs, indicating a bullish trend.

The stock has been up in six of the last eight weeks, indicating that there are plenty of buyers out there.

Investors may want to wait for the stock to take a pause so that the 50-day moving average can catch up.

Earnings are currently the Achilles’ heel, as evidenced by its EPS Rating of 63 out of 99.

According to data, sales increased by 10% in the most recent quarter, and Ferrari has a three-year sales growth rate of 13%.

Experts, on the other hand, predict rapid earnings growth in the next years.

Full-year earnings per share are predicted to rise 20% in 2023 and 15% in 2024.

The institutional opinion is positive, with its Accumulation/Distribution Rating of B indicating recent fund buying.

In the Car Manufacturers Group, RACE now leads Tesla stock. It is only behind Stellantis in second place, with TSLA trailing in fourth place.

RACE Stock has a Large Moat

Analysts say the car company has a large moat due to its distinct brand and high-end offerings.

It is regarded as a great potential investment due to its stable long-term revenue, addressable market growth, profit margin increase, and excellent returns on invested capital.

The organization is also projected to show durability during periods of economic uncertainty due to its customer of high-net-worth individuals.

There are clear indications of strong demand for its products.

In November, the company canceled orders for its new Purosangue SUV because the waiting period had exceeded two years.

Current customers will be given preference on the first manufacturing run.

Analyst Backs Ferrari Stock CFRA analyst Garrett Nelson rates Ferrari stock as a buy with a price target of 314 dollars.

“Ferrari is in a virtuous cycle of strong sales growth, significant R&D investment (about 20% of yearly sales), and ongoing Formula One success-led pricing power,” he wrote in a research note published on February 18.

He also stated that the company’s choice to not cap annual vehicle production at roughly 7,000 to 8,000 units several years ago “continues to pay off in the form of top-line growth.“

This has “mostly flowed through to the bottom line and helped it to withstand inflationary pressures more easily,” according to Nelson.

Is Ferrari Stock a Buy Now?

Ferrari is a company to watch because it has a great brand, high-profit estimates, and optimistic activity in 2023.

It is not a buy at the present, but it is approaching a buy position.

Investors should add it to their watchlists so they can buy when the time arises.

However, with the present stock market rise under pressure and the stock not now trading in a buy zone, buying now involves an additional risk.

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