IBKR
Interactive Brokers Group, Inc.
$92.62
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 284.4% above fair value
You pay
$92.62
Bear
$16.87
Fair
$24.10
Bull
$31.33
Bear
$16.87
-81.8%
ROTCE 13.8% → 1.26x TBV
Fair
$24.10
-74.0%
ROTCE 18.3% → 1.86x TBV
Bull
$31.33
-66.2%
ROTCE 21.1% → 2.21x TBV
Adjust Assumptions
18.3%
11.7%
Key Value Driver
ROTCE (18.3%) vs. cost of equity (11.7%)
Implied Market Multiple
7.69x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (19 analysts)
$109.60
Divergence from AlphaVal
78%
Summary
With ROTCE of 18.3% vs. 11.7% cost of equity, fair P/TBV is 1.86x on $12.04 tangible book, implying $24.10 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 $109.60 (from 19 analysts). Our estimate is 78% 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