ACT
Enact Holdings, Inc.
$42.73
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 55.4% below fair value
You pay
$42.73
Bear
$60.66
Fair
$95.75
Bull
$116.80
Bear
$60.66
+42.0%
ROTCE 9.4% → 1.79x TBV
Fair
$95.75
+124.1%
ROTCE 12.6% → 2.83x TBV
Bull
$116.80
+173.4%
ROTCE 14.5% → 3.45x TBV
Key Value Driver
ROTCE (12.6%) vs. cost of equity (7.0%)
Implied Market Multiple
1.11x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $45.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $95.75 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 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