AMSF
AMERISAFE, Inc.
$31.05
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 46.0% below fair value
You pay
$31.05
Bear
$46.67
Fair
$57.46
Bull
$74.69
Bear
$46.67
+50.3%
ROTCE 15.3% → 4.00x TBV
Fair
$57.46
+85.1%
ROTCE 20.5% → 4.00x TBV
Bull
$74.69
+140.5%
ROTCE 23.5% → 4.00x TBV
Key Value Driver
ROTCE (20.5%) vs. cost of equity (6.0%)
Implied Market Multiple
2.52x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $44.50 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $57.46 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 $44.50 (from 6 analysts). Our estimate is 36% 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