Ferrari Stock Speeds Up After Third-Quarter Beat

The shares of Ferrari NV (NYSE:RACE) are up 6.5% at $195.04 at last check, after the luxury sports car manufacturer reported better-than-expected third-quarter earnings of $1.07 per share, and narrowed this year's guidance to the top end of its forecast. The company attributed the positive results to shipments finally recovering from a halt in production due to the coronavirus pandemic, adding that its order book is beating records and cancellation levels are low.

On the charts, the security has experienced unprecedented growth over the past year. And while shares have cooled off from an Aug. 26 all-time-high of $199.86, today's pop has helped the equity reclaim the 40-day moving average, which had briefly emerged as a ceiling, after a long period acting as support. In the last six months, RACE has gained 24.4%.

Analysts are split toward Ferrari stock, with three of the six in coverage carrying a tepid "hold" or worse rating, and the remaining three sporting a "buy" or better. Meanwhile, the 12-month consensus target price of $200.47 is a 3.2% premium to the equity's current perch.

Digging deeper, RACE could benefit from a short squeeze. Short interest is up 10.8% in the last two reporting periods, and the 1.75 million shares sold short account for 1.5% of the stock's available float. In other words, it would take more than eight days to buy back these bearish bets, at the equity's average pace of daily trading. 

Now certainly looks like a good time to take advantage of RACE options. The security's Schaeffer's Volatility Index (SVI) of 41% sits in the relatively low 28th percentile of all other annual readings, meaning the stock sports attractively priced premiums at the moment.