HOOD
Robinhood Markets, Inc.
$106.65
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 523.0% above fair value
You pay
$106.65
Bear
$11.88
Fair
$17.12
Bull
$20.26
Bear
$11.88
-88.9%
ROTCE 16.4% → 1.24x TBV
Fair
$17.12
-83.9%
ROTCE 21.9% → 1.79x TBV
Bull
$20.26
-81.0%
ROTCE 25.2% → 2.12x TBV
Adjust Assumptions
21.9%
14.0%
Key Value Driver
ROTCE (21.9%) vs. cost of equity (14.0%)
Implied Market Multiple
11.15x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (26 analysts)
$122.86
Divergence from AlphaVal
86%
Summary
With ROTCE of 21.9% vs. 14.0% cost of equity, fair P/TBV is 1.79x on $9.56 tangible book, implying $17.12 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 $122.86 (from 26 analysts). Our estimate is 86% 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