AFRM
Affirm Holdings, Inc.
$70.08
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 100.8% above fair value
You pay
$70.08
Bear
$26.59
Fair
$34.89
Bull
$43.20
Bear
$26.59
-62.1%
ROTCE 20.0% → 1.60x TBV
Fair
$34.89
-50.2%
ROTCE 25.0% → 2.10x TBV
Bull
$43.20
-38.4%
ROTCE 30.0% → 2.60x TBV
Adjust Assumptions
39.1%
14.0%
Key Value Driver
ROTCE (39.1%) vs. cost of equity (14.0%)
Implied Market Multiple
4.22x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (38 analysts)
$95.79
Divergence from AlphaVal
64%
Summary
With ROTCE of 39.1% vs. 14.0% cost of equity, fair P/TBV is 2.10x on $16.62 tangible book, implying $34.89 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Wall Street's average price target is $95.79 (from 38 analysts). Our estimate is 64% below the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly