Just How High Can Silicon Valley Bank's Stock Go?

If you follow the banking sector, then I don't need to tell you that SVB Financial Group (NASDAQ: SIVB), the parent company of Silicon Valley Bank, has been on an absolute tear for more than a year. Before the pandemic, the bank traded at roughly $246 per share, a price it had earned after a long run of phenomenal performance. But the pandemic catapulted the tech and start-up banking powerhouse to the next level, and now SVB trades around $573. That's more than 350% of tangible book value (equity minus goodwill and intangible assets), which is a high valuation in banking.

At this kind of valuation, many investors might already be taking gains, or at least thinking about it. But I'm actually thinking the opposite -- I'm asking myself how high this stock can go, with significant upside in mind.

While much of the industry struggled with high credit costs during the pandemic and is still struggling to find loan growth, SVB has been a different story. The niche bank pioneered start-up banking in the 1990s, and has been catering to the start-up, venture capital, and private equity communities ever since.

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Source Fool.com