CFFN
Capitol Federal Financial, Inc.
$8.66
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 51.4% above fair value
You pay
$8.66
Bear
$4.00
Fair
$5.72
Bull
$7.44
Bear
$4.00
-53.8%
ROTCE 4.9% → 0.30x TBV
Fair
$5.72
-33.9%
ROTCE 6.5% → 0.63x TBV
Bull
$7.44
-14.1%
ROTCE 7.5% → 0.88x TBV
Adjust Assumptions
6.5%
8.0%
Key Value Driver
ROTCE (6.5%) vs. cost of equity (8.0%)
Implied Market Multiple
1.02x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (5 analysts)
$9.75
Divergence from AlphaVal
41%
Summary
With ROTCE of 6.5% vs. 8.0% cost of equity, fair P/TBV is 0.63x on $8.49 tangible book, implying $5.72 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.
Return on equity (6.5%) is below the minimum investors require (8.0%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $9.75 (from 5 analysts). Our estimate is 41% 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