Why Ferrari Outperforms Ford as a Long-Term Buy in 2026

In the automotive sector, where business models range from mass-market volume strategies to luxury exclusivity, Ferrari and Ford represent two divergent philosophies. Over the past decade, Ferrari has consistently outperformed Ford in stock returns, profitability, and resilience during economic downturns. This analysis explores why Ferrari's business model-anchored in brand equity, pricing power, and high-margin exclusivity-positions it as a superior long-term investment compared to Ford's cyclical, volume-driven approach.

10-Year Stock Returns: Ferrari's Dominance

From 2016 to 2026, Ferrari's stock delivered an average annual return of approximately 26%, far outpacing Ford's modest gains according to Barron's analysis. For context, Ferrari's shares surged 22.67% in 2016 and 82.07% in 2017, reflecting its post-spinoff from Fiat Chrysler momentum. Even during the inflationary and volatile period from May 2022 to June 2024, Ferrari's stock more than doubled, while Ford's returns lagged. This disparity underscores Ferrari's ability to capitalize on its premium brand and reinvest capital profitably, whereas Ford's reliance on a limited product lineup and lower returns on invested capital has constrained its growth.

Business Model Quality: High Margins vs. Volume-Driven Cycles

Ferrari's profitability is a testament to its luxury-centric model. In Q3 2025, the company reported a net profit margin of 23.4%, with gross margins hovering near 50.1%. By contrast, Ford's net margin in Q2 2025 was negative ($36 million loss on $50.2 billion in revenue), and its gross margin stands at 14.3%. Ferrari's exclusivity-producing fewer than 15,000 vehicles annually-enables it to command premium pricing and maintain profitability per unit, while Ford's mass-market strategy relies on high sales volumes to offset thin margins. As one analyst notes, It would take 59 Ford vehicles to match the profit from a single Ferrari, highlighting the inefficiency of Ford's per-unit economics.

Brand Strength and Recession Resilience

Ferrari's brand equity acts as a buffer during economic downturns. During the 2008 financial crisis, Ford's stock plummeted by 75%, dropping from $8 to $2 between 2007 and 2009, while Ferrari's financial metrics-bolstered by high gross margins and strong liquidity-allowed it to weather inflationary pressures according to Geneva Partners analysis. Similarly, during the 2020 pandemic, Ferrari's revenue declined by just 1% despite a factory shutdown, whereas Ford's revenue fell from $155.9 billion in 2019 to $127 billion in 2020. Ferrari's robust liquidity ratios (current ratio of 3.4 vs. Ford's 1.17) and interest coverage ratio (35 vs. 2.61) further underscore its ability to withstand financial stress according to Geneva Partners.

Ford's Cyclical Vulnerabilities

Ford's business model is inherently tied to macroeconomic cycles. Its operating profit margin has fluctuated between 2% and 4.5% in recent years, with dips to near 2% in late 2024 and mid-2025 reflecting operational challenges. The company's electric vehicle (EV) segment, Ford Model e, incurred a $1.4 billion loss in Q3 2025, contrasting with the 11.4% margin from its Ford Pro division. This uneven profitability highlights Ford's struggles to balance innovation with profitability. Historically, Ford has thrived during economic upswings but faces significant risks during downturns, with potential sales declines of over 15% in a severe recession.

Conclusion: Ferrari's Long-Term Investment Case

Ferrari's combination of brand strength, pricing power, and high-margin exclusivity creates a durable competitive advantage. Its ability to maintain profitability during recessions-unlike Ford's cyclical exposure-makes it a more reliable long-term buy. With a 10-year stock return of 26% annually and operating margins exceeding 23%, Ferrari's business model is built for consistency, not volatility. For investors seeking resilience and superior returns in the automotive sector, Ferrari's premium positioning and financial discipline offer a compelling case over Ford's volume-driven, cyclical approach.