AlphaMadera's AlphaVal page classifies Arrow Financial Corporation as a Banks, Insurers & Asset Managers business and values it using P/Tangible Book × ROE Quality, then compares the result to the current market price to flag AROW as undervalued, fairly valued, or overvalued.

What is Arrow Financial Corporation's fair value?

Fair value for AROW comes from a P/Tangible Book × ROE Quality model -- the approach AlphaVal selected for this company's Banks, Insurers & Asset Managers classification. The live AlphaVal page shows bear, base, and bull scenarios alongside the key assumption behind each.

How does AlphaMadera value AROW?

AlphaVal routes each company to one of ten valuation archetypes based on its business model. AROW was classified as Banks, Insurers & Asset Managers and is valued using P/Tangible Book × ROE Quality, built from AROW's most recent reported fundamentals.

AROW - Arrow Financial Corporation

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $45.00 DETAILS

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Fair Value Mild

Trading 8.5% below fair value

Current Price $36.39

Bear Case $27.82 23.5% downside ($27.82 - $36.39) / $36.39 = -23.5% ROTCE 8.1% → 0.95x TBV

Fair Value $39.75 9.2% upside ($39.75 - $36.39) / $36.39 = 9.2% ROTCE 10.8% → 1.57x TBV

Bull Case $51.68 42.0% upside ($51.68 - $36.39) / $36.39 = 42.0% ROTCE 12.4% → 1.94x TBV

Adjust Assumptions

Return on Tangible Equity

10.8%

Cost of Equity

8.3%

Key Value Driver

ROTCE (10.8%) vs. cost of equity (8.3%)

Terminal Value % of EV

Implied Market Multiple 1.48x

Market is pricing in (growth)

Plain-Language Summary

With ROTCE of 10.8% vs. 8.3% cost of equity, fair P/TBV is 1.57x on $24.58 tangible book, implying $39.75 per share. DDM cross-check: $19.63.

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.

ℹ Dividend-based valuation: $19.63 (51% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.

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