RIOT
Riot Platforms, Inc.
$24.49
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 105.6% above fair value
You pay
$24.49
Bear
$8.34
Fair
$11.91
Bull
$15.49
Bear
$8.34
-66.0%
ROTCE 4.0% → 0.30x TBV
Fair
$11.91
-51.4%
ROTCE -24.5% → 0.30x TBV
Bull
$15.49
-36.8%
ROTCE -28.2% → 0.30x TBV
Key Value Driver
ROTCE (-24.5%) vs. cost of equity (14.0%)
Implied Market Multiple
3.42x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $27.25 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $11.91 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.
Return on equity (-24.5%) is below the minimum investors require (14.0%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $27.25 (from 18 analysts). Our estimate is 75% 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