FRHC
Freedom Holding Corp.
$167.80
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 186.1% above fair value
You pay
$167.80
Bear
$41.05
Fair
$58.65
Bull
$76.25
Bear
$41.05
-75.5%
ROTCE 8.4% → 1.07x TBV
Fair
$58.65
-65.0%
ROTCE 11.2% → 1.76x TBV
Bull
$76.25
-54.6%
ROTCE 12.9% → 2.17x TBV
Adjust Assumptions
11.2%
8.1%
Key Value Driver
ROTCE (11.2%) vs. cost of equity (8.1%)
Implied Market Multiple
7.54x
Summary
With ROTCE of 11.2% vs. 8.1% cost of equity, fair P/TBV is 1.76x on $22.27 tangible book, implying $58.65 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