FCFS
FirstCash Holdings, Inc
$175.27
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 48.6% above fair value
You pay
$175.27
Bear
$82.54
Fair
$117.92
Bull
$153.30
Bear
$82.54
-52.9%
ROTCE 20.0% → 4.00x TBV
Fair
$117.92
-32.7%
ROTCE 25.0% → 4.00x TBV
Bull
$153.30
-12.5%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
1488.4%
7.3%
Key Value Driver
ROTCE (1488.4%) vs. cost of equity (7.3%)
Implied Market Multiple
342.48x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (19 analysts)
$252.50
Divergence from AlphaVal
53%
Summary
With ROTCE of 1488.4% vs. 7.3% cost of equity, fair P/TBV is 4.00x on $0.51 tangible book, implying $117.92 per share. DDM cross-check: $203.96.
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.
Dividend-based valuation: $203.96 (73% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $252.50 (from 19 analysts). Our estimate is 53% 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