FRHC
Freedom Holding Corp.
$144.15
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 60.7% above fair value
You pay
$144.15
Bear
$62.79
Fair
$89.70
Bull
$116.61
Bear
$62.79
-56.4%
ROTCE 5.7% → 0.40x TBV
Fair
$89.70
-37.8%
ROTCE 7.6% → 0.85x TBV
Bull
$116.61
-19.1%
ROTCE 8.8% → 1.12x TBV
Key Value Driver
ROTCE (7.6%) vs. cost of equity (8.3%)
Implied Market Multiple
7.94x
Summary
With ROTCE of 7.6% vs. 8.3% cost of equity, fair P/TBV is 0.85x on $18.16 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.
Return on equity (7.6%) is below the minimum investors require (8.3%). This means the bank is worth less than the net assets on its books.
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