UPST
Upstart Holdings, Inc.
$31.46
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 105.1% above fair value
You pay
$31.46
Bear
$10.74
Fair
$15.34
Bull
$19.93
Bear
$10.74
-65.9%
ROTCE 5.6% → 0.30x TBV
Fair
$15.34
-51.2%
ROTCE 7.4% → 0.34x TBV
Bull
$19.93
-36.6%
ROTCE 8.5% → 0.45x TBV
Key Value Driver
ROTCE (7.4%) vs. cost of equity (14.0%)
Implied Market Multiple
4.16x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $38.13 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $15.34 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 $38.13 (from 22 analysts). Our estimate is 80% 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