FRHC
Freedom Holding Corp.
$155.62
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 73.5% above fair value
You pay
$155.62
Bear
$62.79
Fair
$89.70
Bull
$116.61
Bear
$62.79
-59.7%
ROTCE 8.4% → 1.10x TBV
Fair
$89.70
-42.4%
ROTCE 11.2% → 1.79x TBV
Bull
$116.61
-25.1%
ROTCE 12.9% → 2.21x TBV
Key Value Driver
ROTCE (11.2%) vs. cost of equity (8.0%)
Implied Market Multiple
6.99x
Summary
With ROTCE of 11.2% vs. 8.0% cost of equity, fair P/TBV is 1.79x on $22.27 tangible book, implying $89.70 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