MKTX
MarketAxess Holdings Inc.
$163.38
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 8.2% below fair value
You pay
$163.38
Bear
$124.52
Fair
$177.89
Bull
$231.26
Bear
$124.52
-23.8%
ROTCE 20.0% → 3.31x TBV
Fair
$177.89
+8.9%
ROTCE 25.0% → 4.00x TBV
Bull
$231.26
+41.5%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
32.8%
8.8%
Key Value Driver
ROTCE (32.8%) vs. cost of equity (8.8%)
Implied Market Multiple
7.65x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (24 analysts)
$142.50
Divergence from AlphaVal
25%
Summary
With ROTCE of 32.8% vs. 8.8% cost of equity, fair P/TBV is 4.00x on $21.35 tangible book, implying $177.89 per share. DDM cross-check: $48.91.
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: $48.91 (73% 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