HOOD
Robinhood Markets, Inc.
$98.87
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 477.4% above fair value
You pay
$98.87
Bear
$11.89
Fair
$17.12
Bull
$20.26
Bear
$11.89
-88.0%
ROTCE 16.4% → 1.24x TBV
Fair
$17.12
-82.7%
ROTCE 21.9% → 1.79x TBV
Bull
$20.26
-79.5%
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
10.35x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$138.60
Divergence from AlphaVal
88%
Summary
With ROTCE of 21.9% vs. 14.0% cost of equity, fair P/TBV is 1.79x on $9.55 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 $138.60 (from 27 analysts). Our estimate is 88% 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