IBKR
Interactive Brokers Group, Inc.
$81.35
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 103.4% above fair value
You pay
$81.35
Bear
$27.99
Fair
$39.99
Bull
$51.99
Bear
$27.99
-65.6%
ROTCE 13.8% → 1.29x TBV
Fair
$39.99
-50.8%
ROTCE 18.3% → 1.90x TBV
Bull
$51.99
-36.1%
ROTCE 21.1% → 2.26x TBV
Key Value Driver
ROTCE (18.3%) vs. cost of equity (11.6%)
Implied Market Multiple
6.73x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $87.67 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $39.99 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 $87.67 (from 19 analysts). Our estimate is 73% 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