Adient (NYSE:ADNT) versus Ferrari (NYSE:RACE) Financial Review

Ferrari (NYSE:RACE) and Adient (NYSE:ADNT) are both auto/tires/trucks companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Valuation and Earnings

This table compares Ferrari and Adient”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferrari	$8.08 billion	9.63	$1.81 billion	$10.11	32.89
Adient	$14.54 billion	0.11	-$281.00 million	($3.62)	-5.46

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

Institutional and Insider Ownership

92.4% of Adient shares are held by institutional investors. 0.9% of Adient shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ferrari	22.36%	43.40%	16.65%
Adient	-2.06%	8.18%	1.89%

Volatility & Risk

Ferrari has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Adient has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Ferrari and Adient, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferrari	0	6	8	3	2.82
Adient	2	6	4	0	2.17

Ferrari currently has a consensus target price of $475.61, indicating a potential upside of 43.02%. Adient has a consensus target price of $27.67, indicating a potential upside of 39.91%. Given Ferrari’s stronger consensus rating and higher possible upside, research analysts plainly believe Ferrari is more favorable than Adient.

Summary

Ferrari beats Adient on 11 of the 15 factors compared between the two stocks.

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.

About Adient

Adient plc engages in the design, development, manufacture, and market of seating systems and components for passenger cars, commercial vehicles, and light trucks. The company's automotive seating solutions include complete seating systems, frames, mechanisms, foams, head restraints, armrests, and trim covers. It serves automotive original equipment manufacturers in North America and South America; Europe, Middle East, and Africa; and the Asia Pacific/China. Adient plc was incorporated in 2016 and is based in Dublin, Ireland.