🏎 Ferrari's Analysis

6 minute read · Issue Number 89 · October 8th, 2021

Oct 08, 2021

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Good morning,

Would you say there’s any connection between Ferrari’s competitive performance in Formula 1 and their quarterly sales?

I say we figure this out – you and me. Together.

I get a bit analytical in this one, but bear with me on this fun ride to the intersection of sports, finance, and data analytics!

Ferrari x F1

Drivers and teams in the F1 earn points based on their final position in a race. Only the first ten drivers per event earn points.

The winner receives 25 points, second place 18 points, and the following positions get 15, 12, 10, 8, 6, 4, 2, and 1, respectively.

Each team can only have two drivers per race – meaning, in one race, the max # of points a team can earn is 43, and the minimum is 0.

Ferrari’s Performance vs. Revenues

To analyze the data, I first gathered the total points earned by Ferrari from 17’ to 19’ and divided them into quarters:

Things get interestingly messy from here:

A regular F1 season goes from March till October — hence, not every quarter has the same number of races (1-2 races on 1Q vs. seven races on 2Q)
More races increase the likelihood of earning more points. To standardize the results, we’ll use average points per quarter. (However, this complicates things (again) because fewer races = smaller sample size = higher error probability.)

The second step was to consolidate the performance into a single table that quantifies just how good Ferraris’ drivers did at the time:

The best ‘outlier’ results (i.e., quarters with the best performances) are the first quarters of 17’ and 18’ – nevertheless, those are just a result of one race each.
The worst outlier result was their last quarter of 19’ – which could be attributed to their awful results in Brazil.

The third step was to look at Ferraris’ revenues for each quarter:

Source: Ferrari’s (RACE) Financial Statements

Ferrari’s best quarter YoY is Q2 consistently.
The best quarter overall was Q2 of 2019.
Worst quarter overall – Q1 of 2017.

Lastly, we’ll put revenues and performance together in a graph and analyze the main takeaways:

Main Takeaways

Is there any influence between Ferrari’s F1 performance and their quarterly revenues?

It's hard to say from our basic analysis, but there probably isn’t a strong correlation.

However, a few intriguing insights may give you “food for thought” from the graph shown above.

If you pay close attention – 2Q revenues kind of follow Q1 performance. However, remember the sample size from Q1 is smaller.

This result could also be attributed to the fact that the F1 season is “back,” and those thinking about buying a Ferrari in Q1 end up doing it on Q2.

Another takeaway I found interesting is that the trendline from Ferrari’s performance in F1 seems to be decreasing – nonetheless, revenues are increasing!

Our analysis is based on basic assumptions and doesn’t consider the other dozen factors that impact both performance and revenues.

Regardless, becoming better at analyzing revenues vs. performance could help us make better predictions and decisions, particularly in finance and investing.

What are your takeaways?

🎙 Halftime Snack of the Week

The Science of Sport & Motion

The latest snack features Dr. Jo Shattuck – founder & CEO of Panthertec – a performance enhancement company that combines data, neuroscience, and biomechanics to capture athlete’s motion and provide sensory feedback.

In our conversation, you’ll discover Jo’s story and path towards finding her mission, understand the value of biomechanics & neuroscience in sports and the wearables market, learn about the challenges that a wearable company faces, and find ideas in the intersection between sports, neuroscience, and biomechanics.

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