Ferrari's strategy of constantly expanding its product pyramid — from the 400 million Tifosi fans at the base, up through used Ferraris, new range cars, special series, Icona, supercars, one-offs, and even former F1 cars — with ever-more-rare tiers to graduate to, is the infrastructure that makes a luxury brand durable, because you never want a customer to feel like they've done it all.

202:37and a real meaningful profit center. >> Yep. I mean, the HP deal alone, the title sponsor of the team is rumored to be a hund00 million a year. >> And the latest Forbes valuations of F1 teams, I think Ferrari, they have the value of the team at 6.5 billion. Is that right? >> Sounds right. >> Yeah, >> sounds right. Yeah. They don't produce the most profit, but they are the most

202:58valuable team because they're Ferrari and everyone pays a little extra premium for Ferrari and everything, >> right? So, you know, of the current market cap, that's what, probably close to 10% of the current market cap is just the value of the team. >> Oh, that's crazy. You're right. >> Yep. And again, you can't really extricate one from the other. >> No, these are one thing. >> Ferrari is Formula 1. Formula 1 is

203:17Ferrari, but it's now a meaningful value and profit driver. >> Yep. Then lastly, 4 and a half% of their revenue is financial services and some other random stuff, including selling engines to other Formula 1 teams. So, this is the money that the Cadillac team is paying to Ferrari to put an engine in their car. >> Yep. >> All right. multiples. For anyone who is not an investor, this is when you look

203:42at the current business, how many years of the current business would you have to pay them to buy the whole company from them? And there's a bunch of different ways to slice it. We're going to look at the price toearnings ratio or PE. Ferrari trades at about 35 times their earnings. And until the luxury slump where LVMH and Hermes and all these other companies got hit too in the

204:06last couple years, it was trading around 50x for their last few years. >> Now for reference, most automakers trade at 8 to 10x and Hermes trades at 35 to 60x again big swing the last few years and LVMH sort of around 25x. So essentially the market agrees with management that this is a luxury company, not a car company. and one of the very very best luxury companies. Not

204:32just a luxury company, but an apex luxury company like valued on a multiple on par with the two very best luxury brands in the entire world. >> Yes. The implication here with a very high price to earnings multiple is that investors believe that the profit streams are a lot more durable and certain compared to traditional automakers. Effectively, there's a high degree of certainty that all these profits will continue. The only other

205:01option when you're looking at why is a PE ratio so high is if you expect it's going to grow, >> right? But that is super duper not what is happening here. I mean, that's like when you would have a high PE multiple for a startup that's growing 300% year-over-year. Revenue growth is actually experiencing a massive slowdown at Ferrari. If there's a bare case at all for Ferrari investors, which you

205:24know, we've quite painted quite the bullcase this whole episode, it's that Ferrari has reached the edge of their extreme pricing power and their ability to sort of keep ratcheting that up at the number of units that they're selling. Management said in their October 2025 investor day that the era of double-digit revenue growth is over and over the next five years, they expect revenue to grow just 5% each