BSRR
Sierra Bancorp
$42.12
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 12.5% below fair value
You pay
$42.12
Bear
$30.48
Fair
$48.16
Bull
$58.77
Bear
$30.48
-27.6%
ROTCE 9.4% → 1.21x TBV
Fair
$48.16
+14.3%
ROTCE 12.5% → 1.91x TBV
Bull
$58.77
+39.5%
ROTCE 14.4% → 2.33x TBV
Key Value Driver
ROTCE (12.5%) vs. cost of equity (8.5%)
Implied Market Multiple
1.63x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $44.00 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $48.16 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.
Dividend-based valuation: $16.91 (66% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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