HOOD
Robinhood Markets, Inc.
$73.64
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 23.3% above fair value
You pay
$73.64
Bear
$41.79
Fair
$59.70
Bull
$77.62
Bear
$41.79
-43.3%
ROTCE 16.4% → 1.24x TBV
Fair
$59.70
-18.9%
ROTCE 21.9% → 1.79x TBV
Bull
$77.62
+5.4%
ROTCE 25.2% → 2.12x TBV
Key Value Driver
ROTCE (21.9%) vs. cost of equity (14.0%)
Implied Market Multiple
7.71x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $117.14 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $59.70 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.
Wall Street's average price target is $117.14 (from 25 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