PYPL
PayPal Holdings, Inc.
$52.51
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 24.0% below fair value
You pay
$52.51
Bear
$48.38
Fair
$69.12
Bull
$89.86
Bear
$48.38
-7.9%
ROTCE 20.0% → 2.17x TBV
Fair
$69.12
+31.6%
ROTCE 25.0% → 2.85x TBV
Bull
$89.86
+71.1%
ROTCE 30.0% → 3.53x TBV
Adjust Assumptions
57.0%
11.4%
Key Value Driver
ROTCE (57.0%) vs. cost of equity (11.4%)
Implied Market Multiple
4.89x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (70 analysts)
$55.88
Divergence from AlphaVal
24%
Summary
With ROTCE of 57.0% vs. 11.4% cost of equity, fair P/TBV is 2.85x on $10.74 tangible book, implying $69.12 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.
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