Financial Analysis: Ferrari (NYSE:RACE) & Lotus Technology (NASDAQ:LOT)

Lotus Technology (NASDAQ:LOT) and Ferrari (NYSE:RACE) are both auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares Lotus Technology and Ferrari’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lotus Technology	-87.61%	N/A	-38.53%
Ferrari	22.81%	46.69%	17.13%

Institutional & Insider Ownership

63.4% of Lotus Technology shares are owned by institutional investors. 0.2% of Lotus Technology shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Lotus Technology and Ferrari, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lotus Technology	0	1	0	0	2.00
Ferrari	0	2	7	0	2.78

Lotus Technology presently has a consensus price target of $7.00, suggesting a potential upside of 428.70%. Ferrari has a consensus price target of $486.67, suggesting a potential upside of 12.00%. Given Lotus Technology’s higher possible upside, analysts clearly believe Lotus Technology is more favorable than Ferrari.

Earnings and Valuation

This table compares Lotus Technology and Ferrari”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lotus Technology	$1.01 billion	0.88	-$742.00 million	($1.56)	-0.85
Ferrari	$6.68 billion	15.77	$1.65 billion	$9.15	47.49

Ferrari has higher revenue and earnings than Lotus Technology. Lotus Technology is trading at a lower price-to-earnings ratio than Ferrari, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Lotus Technology has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500. Comparatively, Ferrari has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Summary

Ferrari beats Lotus Technology on 11 of the 14 factors compared between the two stocks.

About Lotus Technology

Lotus Technology Inc. engages in the design, development, and sale of battery electric lifestyle vehicles worldwide. It also distributes sports cars. The company sells its products under the Lotus brand. Lotus Technology Inc. is based in Shanghai, China.

About Ferrari

Ferrari N.V., through its subsidiaries, engages in design, engineering, production, and sale of luxury performance sports cars worldwide. The company offers range, special series, Icona, and supercars; limited edition supercars and one-off cars; and track cars. It also provides racing cars, and spare parts and engines, as well as after sales, repair, maintenance, and restoration services for cars; and licenses its Ferrari brand to various producers and retailers of luxury and lifestyle goods. In addition, the company operates Ferrari museums in Modena and Maranello; Il Cavallino restaurant in Maranello; and theme parks in Abu Dhabi and Spain. Further, it provides direct or indirect finance and leasing services to retail clients and dealers; manages racetracks; develops and sells a range of apparel and accessories; and operates franchised and owned Ferrari stores. The company also sells its products through a network of authorized dealers operating points of sale, as well as through its website. The company was founded in 1947 and is headquartered in Maranello, Italy.