IBKR
Interactive Brokers Group, Inc.
$80.28
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 233.1% above fair value
You pay
$80.28
Bear
$16.87
Fair
$24.10
Bull
$31.33
Bear
$16.87
-79.0%
ROTCE 13.8% → 1.25x TBV
Fair
$24.10
-70.0%
ROTCE 18.3% → 1.83x TBV
Bull
$31.33
-61.0%
ROTCE 21.1% → 2.18x TBV
Adjust Assumptions
18.3%
11.8%
Key Value Driver
ROTCE (18.3%) vs. cost of equity (11.8%)
Implied Market Multiple
6.78x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (19 analysts)
$105.44
Divergence from AlphaVal
77%
Summary
With ROTCE of 18.3% vs. 11.8% cost of equity, fair P/TBV is 1.83x on $11.84 tangible book, implying $24.10 per share. DDM cross-check: $3.50.
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.
Dividend-based valuation: $3.50 (85% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $105.44 (from 19 analysts). Our estimate is 77% 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