Luca di Montezemolo

effectively, there's a high degree of certainty that all these profits will continue.

The only other option 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 bear case at all for Ferrari investors, which, you know, we've painted quite the bull case 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 year.

It's funny, it took a hit and people still think Ferrari's current revenue streams are so durable that they're willing to pay the next 35 years worth of profits to buy the business today.

And that is after getting crushed.

I

And investors probably got a little bit excited about that 11% and 17% growth rates.

And now that they're hearing 5%, that's sort of why you're seeing this contraction.

But a contraction to 35x price to earnings.

So what's going on in the auto industry in China?

It's probably the place to start.

China's car market is being completely upended by inexpensive, high-quality electric cars.

Domestic EVs.