Ferrari's $360.50 Plunge: A Bearish Storm Amid F1 Frustrations and Valuation Woes?

Summary
• Ferrari (RACE) slumps 3.95% to $360.50, nearing its 52-week low of $356.97
• DCF analysis flags stock as 'overvalued' by 264.6%, despite 70.3% 3-year gains
• F1 struggles, driver tensions, and 2026 regulatory uncertainty weigh on sentiment

Ferrari’s intraday freefall reflects a perfect storm of operational headwinds and valuation skepticism. With the stock trading near its 52-week low and technical indicators flashing bearish signals, investors are grappling with a mix of F1 performance anxieties and financial metrics that suggest overvaluation. The recent 4.7% weekly decline and 9.9% year-to-date drop have sparked debates about whether this is a buying opportunity or a warning shot for luxury automakers.

F1 Frustrations and Valuation Pressures Drive Ferrari's Sharp Decline
Ferrari’s 3.95% intraday drop stems from a confluence of factors: underwhelming F1 performance, driver-public relations tensions, and a DCF analysis flagging the stock as overvalued by 264.6%. The 2025 F1 season’s failure to secure a single grand prix victory, coupled with public criticism from drivers like Charles Leclerc and Lewis Hamilton, has eroded investor confidence. Meanwhile, the Simply Wall St DCF model highlights a stark disconnect between Ferrari’s current $360.50 price and its projected free cash flow, which peaks at €1.93 billion by 2029. This valuation disconnect is exacerbated by a 36x P/E ratio, nearly double the auto industry average, as investors question whether Ferrari’s premium pricing power can sustain its luxury brand narrative.

Options Playbook: Capitalizing on Ferrari's Volatility with Strategic Leverage
• 200-day MA: $453.56 (well above current price)
• RSI: 34.9 (oversold territory)
• MACD: -7.63 (bearish divergence)
• Bollinger Bands: Price at $360.50 near lower band ($366.53)

Ferrari’s technicals paint a bearish near-term picture, with the stock trading 23% below its 200-day MA and RSI hovering near oversold levels. The 52-week range ($356.97–$519.10) suggests a potential rebound could test the $366.53 Bollinger lower band as support. For options traders, two contracts stand out:

• RACE20251219P350 (Put, $350 strike, 12/19 expiration):
- IV: 36.16% (mid-range volatility)
- Delta: -0.287 (moderate sensitivity to price moves)
- Theta: -0.0048 (minimal time decay)
- Gamma: 0.0158 (responsive to price swings)
- Turnover: $81,092 (high liquidity)
- Leverage: 90.25% (aggressive downside potential)
- Payoff (5% downside to $342.48): $7.48 per contract
- Ideal for hedging a potential $350 breakdown, with high leverage amplifying gains if the stock gaps below key support.

• RACE20251219C360 (Call, $360 strike, 12/19 expiration):
- IV: 30.74% (moderate volatility)
- Delta: 0.539 (balanced sensitivity)
- Theta: -0.981 (rapid time decay)
- Gamma: 0.0216 (high responsiveness)
- Turnover: $38,317 (solid liquidity)
- Leverage: 45.18% (moderate upside potential)
- Payoff (5% downside to $342.48): $0 (out of the money)
- A speculative play for a short-term rebound above $360, with high gamma offering quick directional exposure if the stock rallies.

Aggressive bulls may consider RACE20251219P350 into a breakdown below $350, while cautious bears should monitor the 200-day MA as a critical resistance level.

Backtest Ferrari Stock Performance
The backtest of RACE's performance after an intraday plunge of at least -4% from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 55.90%, the 10-Day win rate is 54.37%, and the 30-Day win rate is 57.42%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest was 4.88% over 30 days, suggesting that while there is volatility, RACE can exhibit strong recovery and growth in the following weeks.

Act Now: Ferrari's Crossroads – Position for a 2026 Turnaround or Exit the Overvalued Stallion
Ferrari’s 3.95% intraday plunge underscores a stock at a critical inflection point. While the DCF analysis and 36x P/E ratio suggest overvaluation, the 2026 regulatory reset in F1 and potential driver reshuffle (e.g., Max Verstappen rumors) could catalyze a turnaround. Investors must weigh the risks of a prolonged bearish trend against the allure of a discounted luxury brand. With Tesla (TSLA) up 0.16% as the sector leader, Ferrari’s near-term path hinges on whether its F1 struggles translate to operational improvements or brand erosion. Watch for a $350 breakdown to confirm bearish momentum or a rebound above $366.53 to signal a short-covering rally.