CCB
Coastal Financial Corporation
$43.60
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 19.5% above fair value
You pay
$43.60
Bear
$25.54
Fair
$36.48
Bull
$47.42
Bear
$25.54
-41.4%
ROTCE 7.2% → 0.65x TBV
Fair
$36.48
-16.3%
ROTCE 9.7% → 1.13x TBV
Bull
$47.42
+8.8%
ROTCE 11.1% → 1.42x TBV
Adjust Assumptions
9.7%
9.0%
Key Value Driver
ROTCE (9.7%) vs. cost of equity (9.0%)
Implied Market Multiple
1.37x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (5 analysts)
$69.00
Divergence from AlphaVal
47%
Summary
With ROTCE of 9.7% vs. 9.0% cost of equity, fair P/TBV is 1.13x on $31.82 tangible book, implying $36.48 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 $69.00 (from 5 analysts). Our estimate is 47% below 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