The narrative surrounding the automotive industry hasn’t always been a great one for investors.
The industry is known for being brutally competitive, highly capital-intensive, unpredictable, and cyclical
And worse than anything, it’s known for razor-thin margins. That said, those narratives are changing as vehicles and the industry evolve toward more technologically advanced automobiles, including autonomous driving technology and other high-margin services. The following three stocks have all thrived in their own unique ways and are poised to beat the market going forward.
Ferrari Ferrari (NYSE: RACE) is a unicorn in the sense that it flips nearly all traditional automotive industry stereotypes on their head. Not only does Wall Street see the stock — and value it — more as a luxury brand than a traditional automaker, but Ferrari also earns its historically lofty valuation in multiple ways. First, as you can see in the graphic below, it boasts gross margins above 50%, like many luxury stocks, and dwarfs those of competitors.