ACT
Enact Holdings Inc.
$44.90
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 56.1% below fair value
You pay
$44.90
Bear
$64.76
Fair
$102.22
Bull
$124.69
Bear
$64.76
+44.2%
ROTCE 9.4% → 1.91x TBV
Fair
$102.22
+127.7%
ROTCE 12.6% → 3.02x TBV
Bull
$124.69
+177.7%
ROTCE 14.5% → 3.68x TBV
Key Value Driver
ROTCE (12.6%) vs. cost of equity (6.8%)
Implied Market Multiple
1.17x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $48.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $102.22 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 $48.00 (from 8 analysts). Our estimate is 141% 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