Largest all-digital bank in the U.S. Auto lending leader, plus banking, insurance, and corporate finance. $196B in assets. | Financial Services — Digital Banking / Auto Finance | AGI Score: 4/10 | Analysis date: 2026-03-13
Trading below book value (0.85x) with 14% buybacks. The largest digital-only bank in the U.S. with $196B in assets. Below book for a bank usually means the market thinks the loan book is impaired. ALLY has been writing down goodwill aggressively (from $822M to $190M). The question: is the auto loan book sound?
Ally Financial is a diversified financial services company operating the largest all-digital bank in the U.S. and providing automotive financing, insurance, and corporate finance. With $196 billion in assets, revenue comes from net interest income on loans ($4 billion loans outstanding) and deposits ($4.4 billion), plus fee income from insurance and investment products.
| Sector | Financial Services |
| Industry | Credit Services |
| Employees | 10,300 |
| ROE | 5.8% |
| ROA | 0.4% |
| Gross Margin | 0.0% |
| Operating Margin | 20.4% |
| Profit Margin | 11.6% |
| 52-Week Range | $29.52 — $47.27 |
| Beta | 1.155 |
| Avg Volume | 3,572,400 |
| Short Ratio | 2.84 |
| EV / EBITDA | — |
| Analyst Target | $52.76471 (buy) |
| Float Shares | 277M |
| Payout Ratio | 50.6% |
| Item | Value | % of Assets | Notes |
|---|---|---|---|
| ASSETS ($196.0B) | |||
| PP&E (net) | $1.1B | 0.6% | Physical assets |
| Cash & Equivalents | $10.0B | 5.1% | |
| Goodwill | $190M | 0.1% | Intangible — scrutinize |
| Other Assets | $184.6B | 94.2% | Receivables, investments, etc. |
| LIABILITIES | |||
| Long-Term Debt | $14.4B | 7.4% | |
| Other Liabilities | $166.1B | 84.7% | |
| EQUITY | |||
| Stockholders' Equity | $15.5B | 7.9% | |
| Tangible Book Value | $15.3B | Equity minus goodwill & intangibles | |
| Tangible Book / Share | $49.53 | vs price $36.14 | |
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Revenue | $2.0B | $8.2B | $8.4B | $8.2B | $8.2B | $7.9B |
| Net Income | $687M | $3.0B | $1.6B | $910M | $558M | $742M |
| Total Assets | $182.2B | $182.1B | $191.8B | $196.4B | $191.8B | $196.0B |
| Equity | $14.7B | $17.1B | $12.9B | $13.8B | $13.9B | $15.5B |
| Long-Term Debt | $16.9B | $11.2B | $13.3B | $13.2B | $12.7B | $14.4B |
| Cash | $15.6B | $5.1B | $5.6B | $6.9B | $10.3B | $10.0B |
| OCF | $3.7B | $4.0B | $6.2B | $4.7B | $4.5B | $3.7B |
| PP&E | $726M | $1.2B | $1.3B | $1.3B | $1.3B | $1.1B |
| Goodwill | $343M | $822M | $822M | $669M | $551M | $190M |
| Shares (Diluted) | 377M | 365M | 319M | 305M | 310M | 313M |
| Period | Shares (Diluted) | Change |
|---|---|---|
| 2020-12-31 | 377,101,000 | |
| 2021-12-31 | 365,180,000 | -3.2% |
| 2022-12-31 | 318,629,000 | -12.7% |
| 2023-12-31 | 305,135,000 | -4.2% |
| 2024-12-31 | 310,160,000 | +1.6% |
| 2025-12-31 | 313,043,000 | +0.9% |
| Total Change | -17.0% |
Significant buyback activity. Share count declining 17% over the period. This mechanically increases EPS and book value per share even with no underlying growth.
Current EPS: $2.37 | Current Book/Share: $49.51 | Current Price: $36.14
| Scenario | 7yr Future Price | Entry for 10x | vs Current | Assumptions |
|---|---|---|---|---|
| Conservative | $48.75 | $4.87 | +641% below | 8% EPS growth, 12x exit P/E |
| Bull Case | $94.57 | $9.46 | +282% below | 15% EPS growth, 15x exit P/E |
| Buyback Only | $30.78 | $3.08 | +1074% | No revenue growth, buybacks continue at current rate, 12x P/E |
| Demand Boost | 2/10 | How much AGI increases demand for this company's products |
| Margin Expansion | 7/10 | How much AGI reduces costs / expands margins |
| Strategic Assets | 4/10 | Unique assets that become more valuable with AGI |
| Disruption Risk | 6/10 | Risk that AGI disrupts the core business model |
| Innovation Risk | 5/10 | Risk of being out-innovated by AGI-native competitors |
| Overall AGI Score | 4/10 | Category: labor_margin_play |
Reasoning: Banking is labor-intensive (customer service, underwriting, compliance, fraud detection) with substantial AGI cost-reduction potential, but faces severe competitive and revenue risks. AGI can automate most banking operations, but all banks gain access to similar tools, compressing margins industry-wide. Disruption risk is high: (1) autonomous vehicles could eliminate auto finance (core business), (2) AGI-powered credit decisioning could commoditize lending, (3) blockchain/DeFi could disintermediate traditional banking entirely. Their digital-only model and data ($196B managed) provide some advantage but aren't uniquely defensible. Innovation risk includes AGI creating novel financial products that displace traditional banking. The deposit franchise has value as AGI still needs capital, but competitive dynamics likely prevent capturing margin gains.
ALLY (Ally Financial) trades at 0.85x book value (0.73x tangible book) with $742M net income on a $11.2B market cap (6.6% earnings yield). ROE of 5.8%. Shares have declined 17% over the measurement period through buybacks.
Verdict: WATCHLIST (with caution). Below book value for a digital bank is interesting, but net income dropped 75% from peak ($3B to $742M). Auto loan credit is the central question. The aggressive goodwill writedowns ($822M to $190M) suggest management is being conservative, which is good. But the 0.85x P/B for a bank with declining earnings and rising credit losses is not obviously cheap — it may be fair. Need to see credit cycle play out. Entry zone: $28-32 (floor based on tangible book stress scenario).
Data sources: SEC EDGAR XBRL (CIK 40729), yfinance, 10-K filing, AGI scoring framework. Analysis date: 2026-03-13.