SOFI
SoFi Technologies, Inc.
$17.32
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 772.7% above fair value
Bear
$1.98
-88.5%
ROTCE 4.3% → 0.30x TBV
Fair
$1.98
-88.5%
ROTCE 5.7% → 0.30x TBV
Bull
$1.98
-88.5%
ROTCE 6.5% → 0.30x TBV
Adjust Assumptions
5.7%
14.0%
Key Value Driver
ROTCE (5.7%) vs. cost of equity (14.0%)
Implied Market Multiple
2.62x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$21.58
Divergence from AlphaVal
91%
Summary
With ROTCE of 5.7% vs. 14.0% cost of equity, fair P/TBV is 0.30x on $6.62 tangible book, implying $1.98 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 $21.58 (from 27 analysts). Our estimate is 91% 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