Is BRK-B undervalued?

AlphaMadera's AlphaVal page classifies Berkshire Hathaway Inc. 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 BRK-B as undervalued, fairly valued, or overvalued.

What is Berkshire Hathaway Inc.'s fair value?

Fair value for BRK-B 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 BRK-B?

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

BRK-B - Berkshire Hathaway Inc.

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $604.00 DETAILS

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Fair Value Moderate

Trading 23.5% below fair value

Current Price $515.44

Bear Case $471.72 8.5% downside ($471.72 - $515.44) / $515.44 = -8.5% ROTCE 8.4% → 1.21x TBV

Fair Value $673.88 30.7% upside ($673.88 - $515.44) / $515.44 = 30.7% ROTCE 11.2% → 1.99x TBV

Bull Case $876.04 70.0% upside ($876.04 - $515.44) / $515.44 = 70.0% ROTCE 12.8% → 2.45x TBV

Adjust Assumptions

Return on Tangible Equity

11.2%

Cost of Equity

7.6%

Key Value Driver

ROTCE (11.2%) vs. cost of equity (7.6%)

Terminal Value % of EV

Implied Market Multiple 1.85x

Market is pricing in (growth)

Plain-Language Summary

With ROTCE of 11.2% vs. 7.6% cost of equity, fair P/TBV is 1.99x on $277.95 tangible book, implying $673.88 per share.

Analyst Consensus (External Reference)

Never blended into the bear/base/bull estimates above -- shown only as an outside comparison.

Average Target (10 analysts) $604.00

Analyst Range $604.00 – $604.00

Divergence from AlphaVal 12%

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.

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