STRD
MicroStrategy Incorporated 10.00% Series A Perpetual Stride Preferred Stock
$73.59
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 39.4% above fair value
You pay
$73.59
Bear
$51.55
Fair
$52.80
Bull
$68.64
Bear
$51.55
-30.0%
ROTCE 4.0% → 0.30x TBV
Fair
$52.80
-28.3%
ROTCE -7.5% → 0.30x TBV
Bull
$68.64
-6.7%
ROTCE -8.7% → 0.30x TBV
Key Value Driver
ROTCE (-7.5%) vs. cost of equity (14.0%)
Implied Market Multiple
0.43x
Summary
With ROTCE of -7.5% vs. 14.0% cost of equity, fair P/TBV is 0.30x on $171.82 tangible book, implying $52.80 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 (-7.5%) is below the minimum investors require (14.0%). This means the bank is worth less than the net assets on its books.
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