BOW
Bowhead Specialty Holdings Inc.
$34.03
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 32.5% below fair value
You pay
$34.03
Bear
$36.21
Fair
$50.43
Bull
$50.43
Bear
$36.21
+6.4%
ROTCE 9.7% → 2.87x TBV
Fair
$50.43
+48.2%
ROTCE 13.0% → 4.00x TBV
Bull
$50.43
+48.2%
ROTCE 14.9% → 4.00x TBV
Adjust Assumptions
13.0%
6.0%
Key Value Driver
ROTCE (13.0%) vs. cost of equity (6.0%)
Implied Market Multiple
2.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$32.80
Divergence from AlphaVal
54%
Summary
With ROTCE of 13.0% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $12.61 tangible book, implying $50.43 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 $32.80 (from 7 analysts). Our estimate is 54% 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