SOFI
SoFi Technologies, Inc.
$18.24
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 37.5% above fair value
You pay
$18.24
Bear
$9.28
Fair
$13.26
Bull
$17.25
Bear
$9.28
-49.1%
ROTCE 4.3% → 0.30x TBV
Fair
$13.26
-27.3%
ROTCE 5.7% → 0.30x TBV
Bull
$17.25
-5.4%
ROTCE 6.5% → 0.30x TBV
Key Value Driver
ROTCE (5.7%) vs. cost of equity (14.0%)
Implied Market Multiple
2.76x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $21.40 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $13.26 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 (5.7%) 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 $21.40 (from 27 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