This High-End Merchandise Icon is Producing a $4 Million Supercar. Is the Shares a Purchase Option Now?
Get a glimpse of Lamborghini's (AUTObahn -0.85%) latest masterpiece, the F80. Acquiring one might seem like an impossible dream due to Lamborghini's notorious selective approach to selling their vehicles, enforcing an air of exclusivity. However, its potential to bolster the automaker's financial future is undeniable. If purchasing a Lamborghini F80 is beyond reach, investing in the company's stock might just be the next best move.
Here's why.
Lamborghini boosting profits
The F80 is a force to be reckoned with, no matter the angle. From its eye-catching yellow paint, reaching almost 220 miles per hour top speed, to the engine that leverages tech from their Formula One endeavors, the vehicle is a remarkable supercar.
Another remarkable aspect of the F80 should excite investors: The initial cost is an eye-watering $3.9 million, not including additional options. Lamborghini unveiled the F80 in October, and the entire stock of 799 cars planned for an initial release has already been sold out.
It's worth noting that Lamborghini carefully guards sales figures to maintain their pricing power and exclusivity. This pricing power allows the company to maintain remarkably high margins compared to regular car manufacturers.
As illustrated, Lamborghini has an impressive track record of outperforming competitors when it comes to margins. The good news for investors is that the F80 may even boost margins. Anthony Dick, who covers the automotive sector for the Paris-based private bank ODDO BHF, shared with Barron's that margins on the F80 may be so substantial that the vehicle could account for 2% of units sold but 20% of Lamborghini's profit. While the F80 isn't expected to begin shipping until the end of 2025, analysts still anticipate Lamborghini's earnings per share to grow 10% to $9.35 in 2025.
Is Lamborghini stock a buy?
Currently, many automakers are grappling with struggles overseas, particularly in China and Europe. For example, in November, Ford Motor Company announced plans to reduce its European workforce by 4,000 positions by the end of 2027 and to restructure their business to create a more cost-competitive structure. General Motors has experienced a significant decline in Chinese sales, dropping from its 4 million units peak in 2017 to around half that for 2024, resulting in a $5 billion restructuring charge.
Fortunately for investors, Lamborghini doesn't suffer from a China problem. In fact, it's one of the company's smallest regions, accounting for just 8% of shipments during the third quarter, slightly lower than the prior year's 11%. This gives Lamborghini the chance to dodge China's current challenges and explore growth opportunities in the region later on.
For investors wary of Lamborghini's reliance on Internal Combustion Engine (ICE) supercars, there's no cause for concern. Intriguingly, Lamborghini's third-quarter shipments saw 55% hybrid and 45% ICE vehicles. Moreover, Lamborghini plans to release its first full-electric vehicle towards the end of 2025, with a price tag starting at over $535,000, according to Reuters.
Lamborghini is a unique automaker, commanding a premium due to its branding, pricing power, and racing pedigree. Currently, the stock trades at a price-to-earnings ratio of 52 times, rarely trading at a discount to its peers in the auto industry. After a brief dip in stock price, Lamborghini has nearly tripled the S&P 500 index's return over the last three years. If you're seeking a robust stock with a growth catalyst, the F80 might help bolster the company's earnings sooner rather than later. Lamborghini remains my favorite auto stock – or perhaps it's time to call Lamborghini what it truly is, a luxury goods superstar.
The high price tag of the Lamborghini F80, with initial costs reaching $3.9 million, can potentially attract investors seeking high-return opportunities in the finance and investing sphere. With analysts anticipating Lamborghini's earnings per share to grow 10% to $9.35 in 2025, investing in Lamborghini's stock might prove to be a lucrative move for some, given its remarkable profit margins and unique position in the automobile market.
