There are some special businesses out there that just don't fit neatly into the traditional industry buckets. For example, while Ferrari (RACE 1.89%) is certainly a car manufacturer, it's also a world-renowned luxury brand. That distinctive combination has worked to its benefit.

Since this automaker's initial public offering in October 2015, its stock has soared by 691% (as of this writing). That's a nearly eight-fold gain in roughly nine years' time. But with that impressive performance in the rear-view mirror, should investors view Ferrari shares as a no-brainer buying opportunity right now?

Ferrari is a great business

It's almost impossible that investors who take the time to understand this company won't come away impressed. Ferrari has proven to be a fantastic business. There are a few reasons why.

Ferrari has consistently posted solid growth. Between 2018 and 2023, its revenue increased at a compound annual rate of 11.8%. It was up 6.5% year over year in the third quarter. All of this was driven by healthy gains in terms of unit volumes.

To be clear, this is a luxury brand. Ferrari sold only 3,383 cars in Q3. It could easily sell far more. But its limited production is purely by design. It's all about maintaining the brand's image of status and exclusivity.

Not just anyone can buy a new Ferrari. There's a long waiting list to even be considered as a potential customer. The company likely wants to be sure that those who own its vehicles will be good stewards of the brand over the long term.

That brand strength and exclusivity give Ferrari serious pricing power. Some special models can cost over $1 million. But given that these supercars are viewed as collectible items by the elite customers who can afford them, the business can comfortably raise its prices over time, more than offsetting any inflationary pressures.

"The single most important decision in evaluating a business is pricing power," the legendary Warren Buffett once said. "If you've got the power to raise prices without losing business to a competitor, you've got a very good business." There's no doubt that Ferrari falls in this category.

The combination of that strong brand and pricing power has resulted in tremendous profitability. Last quarter, Ferrari posted a stellar adjusted operating margin of 28.4%. That figure is significantly better than what mass-market automakers achieve. It's even superior to Tesla.

Because it caters to some of the wealthiest individuals on the face of the planet, this company is somewhat recession-proof. Sure, an economic downturn in which unemployment soars and consumer spending is pressured might have a small negative impact. But Ferrari's target audience of extremely high-net-worth individuals are better able to navigate recessions than the vast majority of people -- without making many changes to their lifestyles.

Ferrari's premium price tag

When you peek under Ferrari's hood, it's hard not to come away impressed. This is a high-quality enterprise, and its stock should be on investors' watch lists.

However, after such huge share price gains, the stock isn't cheap by any measure. This is true even though it currently trades 12% off the peak it established in August.

Shares now carry a price-to-earnings ratio of 50.5. That's about double the average valuation of the S&P 500.

Bulls might believe this steep multiple is warranted. But the best course of action, in my opinion, would be to continue following the business and wait for a sizable pullback in the valuation before adding it to your portfolio.