HOOD
Robinhood Markets, Inc.
$106.02
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 77.7% above fair value
You pay
$106.02
Bear
$41.75
Fair
$59.65
Bull
$77.55
Bear
$41.75
-60.6%
ROTCE 16.4% → 1.24x TBV
Fair
$59.65
-43.7%
ROTCE 21.9% → 1.79x TBV
Bull
$77.55
-26.9%
ROTCE 25.2% → 2.12x TBV
Key Value Driver
ROTCE (21.9%) vs. cost of equity (14.0%)
Implied Market Multiple
11.1x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $116.93 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $59.65 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.
Wall Street's average price target is $116.93 (from 26 analysts). Our estimate is 65% 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