ACIC
American Coastal Insurance Corporation
$11.08
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 67.1% below fair value
You pay
$11.08
Bear
$23.56
Fair
$33.66
Bull
$43.76
Bear
$23.56
+112.7%
ROTCE 20.0% → 4.00x TBV
Fair
$33.66
+203.8%
ROTCE 25.0% → 4.00x TBV
Bull
$43.76
+295.0%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
49.3%
6.0%
Key Value Driver
ROTCE (49.3%) vs. cost of equity (6.0%)
Implied Market Multiple
2.48x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (5 analysts)
$13.00
Divergence from AlphaVal
159%
Summary
With ROTCE of 49.3% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $4.47 tangible book, implying $33.66 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 $13.00 (from 5 analysts). Our estimate is 159% 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