APO-PA
Apollo Global Management, Inc.
$66.21
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 65.2% below fair value
You pay
$66.21
Bear
$133.22
Fair
$190.32
Bull
$247.42
Bear
$133.22
+101.2%
ROTCE 19.3% → 1.77x TBV
Fair
$190.32
+187.4%
ROTCE 25.0% → 2.51x TBV
Bull
$247.42
+273.7%
ROTCE 29.6% → 2.96x TBV
Key Value Driver
ROTCE (25.7%) vs. cost of equity (12.7%)
Implied Market Multiple
2.19x
Summary
With ROTCE of 25.7% vs. 12.7% cost of equity, fair P/TBV is 2.51x on $30.22 tangible book, implying $190.32 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.
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