ACT
Enact Holdings Inc.
$44.96
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 60.4% below fair value
You pay
$44.96
Bear
$71.96
Fair
$113.57
Bull
$138.54
Bear
$71.96
+60.0%
ROTCE 9.4% → 1.88x TBV
Fair
$113.57
+152.6%
ROTCE 12.6% → 2.96x TBV
Bull
$138.54
+208.1%
ROTCE 14.5% → 3.61x TBV
Adjust Assumptions
12.6%
6.9%
Key Value Driver
ROTCE (12.6%) vs. cost of equity (6.9%)
Implied Market Multiple
1.17x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$45.00
Divergence from AlphaVal
152%
Summary
With ROTCE of 12.6% vs. 6.9% cost of equity, fair P/TBV is 2.96x on $38.36 tangible book, implying $113.57 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 $45.00 (from 9 analysts). Our estimate is 152% 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