UPST
Upstart Holdings, Inc.
$24.10
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 835.3% above fair value
You pay
$24.10
Bear
$2.27
Fair
$2.58
Bull
$3.42
Bear
$2.27
-90.6%
ROTCE 5.6% → 0.30x TBV
Fair
$2.58
-89.3%
ROTCE 7.4% → 0.34x TBV
Bull
$3.42
-85.8%
ROTCE 8.5% → 0.45x TBV
Adjust Assumptions
7.4%
14.0%
Key Value Driver
ROTCE (7.4%) vs. cost of equity (14.0%)
Implied Market Multiple
3.19x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$39.50
Divergence from AlphaVal
93%
Summary
With ROTCE of 7.4% vs. 14.0% cost of equity, fair P/TBV is 0.34x on $7.56 tangible book, implying $2.58 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 (7.4%) 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 $39.50 (from 22 analysts). Our estimate is 93% 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