You'd think it would be hard to make an investment case for Ferrari (NYSE:RACE), given that its stock is currently trading at a stratospheric 38 times earnings. But CEO Louis Camilleri and his team did their best this past week, presenting their plan to roughly double Ferrari's profit by 2022. 

It's not often that you hear a 70-year-old industrial company promise to double its profits over a relatively short timeline. But Ferrari is more than an industrial company -- it's also, arguably, a luxury-goods company, and the market for top-shelf luxury goods has expanded well beyond Ferrari's traditional strongholds in Europe and the United States. 

That gives it an opportunity -- two opportunities, in fact, that together should deliver that product boost. Camilleri's plan is to launch 15 new products to take advantage of both. 

A yellow Ferrari 812 Superfast, a swoopy front-engined two-seat sports car.

The flagship of Ferrari's regular production model line is the 812 Superfast, a two-seat sports car powered by a thunderous V-12 engine. Image source: Ferrari N.V.

Ferrari's two growth opportunities 

As Camilleri sees it, Ferrari has two separate opportunities to increase its revenue and its margins, which in turn will lead to that outsized profit growth. 

First, the growing numbers of wealthy consumers in places like China give Ferrari a once-in-a-generation opportunity to boost sales without compromising its exclusivity -- or in other words, without compromising its pricing power.

Second, Ferrari sees an opportunity to sell more limited-edition, exclusive vehicles to Ferrari's best current customers, wealthy enthusiasts who already own several of its cars. These products sell in tiny numbers -- a few hundred each -- but their impact on margins is outsized, thanks to their seven-figure price tags. 

So what's the plan? Ferrari will launch 15 new products between now and 2022, aiming to take advantage of both those opportunities. The company didn't give us all the details of its upcoming products, of course, but it dropped quite a few hints. Maybe more important for investors, it explained how it thinks about its products -- and that will help us understand its plan and evaluate its chances of success over the next few years. 

The new Ferraris that will double profits

Going forward, nearly all Ferraris will fall into one of four categories. (There will occasionally be a vehicle that falls into a fifth category -- more on that below.) 

1. Sports cars: Ferrari's bread and butter

Sports cars are the high-performance models that most people think of when they think of Ferraris. The current 488 and 810 Superfast models are in this category: very fast, agile road cars with just two seats that are well suited to track use. 

Ferrari's next sports cars will include two mid-engined models. (That's a change: The 488 is mid-engined, with its engine just behind the driver; but the 810 Superfast has its V-12 engine in front of the passenger compartment.)

One of the new models will be a successor to the 488, designed to offer maximum driving enjoyment. The other will be a higher-end model that Ferrari says will feel very, very fast. Both will be hybrids, adding electric drive to Ferrari's traditional internal-combustion engines to enhance performance while reducing fuel consumption. Both will be launched by 2021. 

2. Gran Turismo: Plush and stylish vehicles, including a new SUV

Translated as "grand touring," and often abbreviated as "GT," gran turismo is a traditional European term for a luxurious road car that is fast, but more comfortable than a sports car for a long journey. They're generally not meant for the track. While Ferrari's sports cars are strictly two-seaters, Ferrari's gran turismo models have often had four seats. Ferrari's current GTC4Lusso and Portofino models, both four-seaters, fit here. (The back seat of the Portofino is pretty cramped, but two adults can sit comfortably in the back of the GTC4Lusso.) 

A silver Ferrari Portofino, a convertible, with its top down, parked on a waterfront.

Ferrari's newest gran turismo is the Portofino, a four-seat convertible powered by a turbocharged V-8. Image source: Ferrari N.V.

Ferrari thinks that its gran turismo models are key to winning more customers in places like China. It plans to add several new models to the range over the next four years. Notably, there will be an SUV-inspired vehicle, which Ferrari will name Purosangue, the Italian word for thoroughbred (as in horses). 

Ferrari executives speaking on Tuesday made it clear that this isn't going to be an ordinary SUV: It'll have four seats, adjustable ride height for rough terrain, and possibly four doors. But they promise it'll be a Ferrari, not just another truck. The Purosangue will arrive sometime in 2022, Ferrari said.

3. Special series: Limited-run variations for enthusiasts

These are variants of Ferrari's regular-production sports cars and GTs that offer buyers a different experience. They're typically limited editions, and they generally sell at higher prices (and deliver fatter margins) than the regular models. 

A 488 Pista, a two-seat, mid-engined sports car in red with black and white racing stripes, viewed from above.

The Ferrari 488 Pista is a limited-edition, track-focued version of its 488GTB sports car. Image source: Ferrari N.V.

An example: Right now, Ferrari is offering Pista ( Italian for "track") versions of its 488 sports car. The 488 Pista models come with more power, sharpened handling, distinctive paint, and other unique features. They're also more expensive than the basic 488, but the idea is that they offer an enhanced experience that might appeal to some buyers -- and some exclusivity, as the series is limited.

Simply put, Ferrari is going to do more of these. It'll offer special-series versions of its upcoming gran turismo models as well as its sports cars. 

4. Icona: A new line of instant classics, priced accordingly

Icona is an all-new product category for Ferrari, but it builds on Ferrari's success with what it calls "hypercars." These are occasional limited-production models with cutting-edge technologies and exceptionally high performance. The most recent hypercar was the LaFerrari, a hybrid sports car with nearly 1,000 horsepower and handling enhanced by a series of computer controls. 

Of note for investors: Ferrari limited production to just 499 LaFerraris (and another 210 examples of an open-top variant, the LaFerrari Aperta). The average sale price was probably around $2 million, the profit margin was very, very fat -- and both versions sold out more or less instantly. 

A Ferrari Monza SP1, a single-seat open-top car, silver with yellow racing stripe, viewed from above.

The first of Ferrari's new Icona models is the radical Monza SP1. Its body was inspired by 1950s Ferrari race cars, but its underpinnings are from the 812 Superfast. Image source: Ferrari N.V.

Ferrari's new Icona models aim to tap that same demand, but in a somewhat different way. Rather than being super-fast technological showcases, the Icona Ferraris will offer unique styling inspired by historic Ferraris, but with modern technology taken largely from Ferrari's regular-production models. Expect limited production runs (just a few hundred), high prices (well into seven figures) -- and a new one every year or so.

Ferrari showed the first Icona model this past week. Called the Monza, it's a sleek open-top speedster inspired by 1950s-era Ferrari racers. It's a single-seater (a second seat is an extra-cost option) that lacks even a windshield, but it has the 798-horsepower V-12 engine from the 812 Superfast. Ferrari didn't announce its price or how many it will make, but it reportedly starts around $1.7 million -- and it's already sold out. 

Hypercars: None planned for several years

Ferrari's hypercars are the occasional fifth category I mentioned above. The thing to know right now is that there won't be a new one until after 2022.

A red LaFerrari hypercar, a two-seat, mid-engine sports car.

Ferrari's most recent hypercar was the LaFerrari, powered by a gasoline-electric hybrid drivetrain that included a V-12 engine. Ferrari sold just 499 of them at a starting price of $1.5 million. Image source: Ferrari N.V.

The summary: Revenue growth plus margin growth equals profit growth

I know that not all investors are interested in the nitty-gritty of product plans. If that's you, and you've skipped to the end, here are the key things to know:

  • Ferrari is aiming to increase its profit significantly by 2022.
  • It'll boost profit by boosting sales (and revenue) while also increasing its profit margins.
  • It'll boost sales with new models aimed at new buyers, particularly gran turismo models -- including the new Purosangue SUV, due in 2022. 
  • It'll boost margins by offering high-priced limited-edition models more frequently, giving its wealthy repeat customers exclusive new cars to buy. 

If Ferrari's new models deliver, and if the global economy stays healthy, it should all add up to a significant boost in the company's profits over the next four years. With luck, its stock price will increase significantly as well. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.