IBKR
Interactive Brokers Group, Inc.
$93.56
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 122.4% above fair value
You pay
$93.56
Bear
$29.45
Fair
$42.08
Bull
$54.70
Bear
$29.45
-68.5%
ROTCE 13.8% → 1.28x TBV
Fair
$42.08
-55.0%
ROTCE 18.3% → 1.89x TBV
Bull
$54.70
-41.5%
ROTCE 21.1% → 2.25x TBV
Key Value Driver
ROTCE (18.3%) vs. cost of equity (11.6%)
Implied Market Multiple
7.74x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $96.00 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $42.08 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 $96.00 (from 19 analysts). Our estimate is 75% 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