AMSF
AMERISAFE, Inc.
$30.61
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 44.3% below fair value
You pay
$30.61
Bear
$44.64
Fair
$54.96
Bull
$71.44
Bear
$44.64
+45.8%
ROTCE 15.3% → 4.00x TBV
Fair
$54.96
+79.5%
ROTCE 20.5% → 4.00x TBV
Bull
$71.44
+133.4%
ROTCE 23.5% → 4.00x TBV
Key Value Driver
ROTCE (20.5%) vs. cost of equity (6.0%)
Implied Market Multiple
2.48x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $32.00 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $54.96 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 $32.00 (from 6 analysts). Our estimate is 90% 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