MKTX
MarketAxess Holdings Inc.
$164.26
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 7.7% below fair value
You pay
$164.26
Bear
$124.52
Fair
$177.89
Bull
$231.26
Bear
$124.52
-24.2%
ROTCE 20.0% → 3.43x TBV
Fair
$177.89
+8.3%
ROTCE 25.0% → 4.00x TBV
Bull
$231.26
+40.8%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
32.8%
8.7%
Key Value Driver
ROTCE (32.8%) vs. cost of equity (8.7%)
Implied Market Multiple
7.69x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (24 analysts)
$148.83
Divergence from AlphaVal
20%
Summary
With ROTCE of 32.8% vs. 8.7% cost of equity, fair P/TBV is 4.00x on $21.35 tangible book, implying $177.89 per share. DDM cross-check: $50.28.
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: $50.28 (72% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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