BTBT
Bit Digital, Inc.
$1.99
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 61.7% below fair value
You pay
$1.99
Bear
$3.64
Fair
$5.20
Bull
$6.76
Bear
$3.64
+82.9%
ROTCE 4.0% → 0.30x TBV
Fair
$5.20
+161.3%
ROTCE -11.6% → 0.30x TBV
Bull
$6.76
+239.7%
ROTCE -13.4% → 0.30x TBV
Key Value Driver
ROTCE (-11.6%) vs. cost of equity (14.0%)
Implied Market Multiple
1.01x
Summary
With ROTCE of -11.6% vs. 14.0% cost of equity, fair P/TBV is 0.30x on $1.98 tangible book, implying $5.20 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.
Return on equity (-11.6%) is below the minimum investors require (14.0%). This means the bank is worth less than the net assets on its books.
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