ACIC
American Coastal Insurance Corporation
$10.80
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 60.5% below fair value
You pay
$10.80
Bear
$19.11
Fair
$27.31
Bull
$35.50
Bear
$19.11
+77.0%
ROTCE 20.0% → 4.00x TBV
Fair
$27.31
+152.9%
ROTCE 25.0% → 4.00x TBV
Bull
$35.50
+228.7%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (49.3%) vs. cost of equity (6.0%)
Implied Market Multiple
2.41x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $1.90 from 5 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $27.31 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.
Wall Street's average price target is $1.90 (from 5 analysts). Our estimate is 1672% above 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