AFRM
Affirm Holdings, Inc.
$68.60
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 121.8% above fair value
You pay
$68.60
Bear
$23.57
Fair
$30.93
Bull
$38.30
Bear
$23.57
-65.6%
ROTCE 20.0% → 1.60x TBV
Fair
$30.93
-54.9%
ROTCE 25.0% → 2.10x TBV
Bull
$38.30
-44.2%
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
4.66x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$97.47
Divergence from AlphaVal
68%
Summary
With ROTCE of 39.1% vs. 14.0% cost of equity, fair P/TBV is 2.10x on $14.73 tangible book, implying $30.93 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 $97.47 (from 36 analysts). Our estimate is 68% 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