Under the leadership of CEO Sergio Marchionne, who is also CEO of Fiat Chrysler, the company has exceeded production expectations since its IPO, putting out 8,000 cars in 2016 and forecasting 8,400 more in 2017.
And, according to Cramer, Ferrari seems to have maintained its pricing power, even though the company does not disclose the average selling price of its cars.
"Still, we know Ferrari's production increased by 4.6% last year, and its car and spare parts revenue increased by 4.8%," Cramer noted. "In other words, either Ferrari is selling an incredible amount of spare parts, or its pricing pretty much held steady, and I think the latter makes more sense."
Additional revenue streams for Ferrari include its engine business, which it conducts with Fiat Chrysler's high-end brands, sponsorship for its Formula One team, and demand in Europe, the Middle East, and Africa.
Ferrari's margins also got a boost from management, who initiated major cuts to the company's in-house costs, pushing its operating margin up by 480 basis points over the past two years, or over 20 percent.
As analysts race to give RACE the upgrades and price targets the rising stock seems to have warranted, Cramer's big problem with Ferrari's stock is that it is expensive, trading at about 31 times 2018 earnings estimates.
"The stock of Ferrari is like driving an actual Ferrari — it's really pricey and you need to be in love with risk to justify buying it," Cramer said.
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