NU
Nu Holdings Ltd.
$16.12
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 100.8% above fair value
You pay
$16.12
Bear
$6.12
Fair
$8.03
Bull
$8.49
Bear
$6.12
-62.1%
ROTCE 20.0% → 2.88x TBV
Fair
$8.03
-50.2%
ROTCE 25.0% → 3.78x TBV
Bull
$8.49
-47.3%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
27.9%
9.6%
Key Value Driver
ROTCE (27.9%) vs. cost of equity (9.6%)
Implied Market Multiple
7.59x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (23 analysts)
$16.53
Divergence from AlphaVal
51%
Summary
With ROTCE of 27.9% vs. 9.6% cost of equity, fair P/TBV is 3.78x on $2.12 tangible book, implying $8.03 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 $16.53 (from 23 analysts). Our estimate is 51% 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