GDOT
Green Dot Corporation
$12.78
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 26.3% below fair value
You pay
$12.78
Bear
$12.13
Fair
$17.33
Bull
$22.53
Bear
$12.13
-5.1%
ROTCE 4.0% → 0.30x TBV
Fair
$17.33
+35.6%
ROTCE -19.2% → 0.30x TBV
Bull
$22.53
+76.3%
ROTCE -22.0% → 0.30x TBV
Key Value Driver
ROTCE (-19.2%) vs. cost of equity (9.1%)
Implied Market Multiple
1.4x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $16.13 from 39 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $17.33 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 (-19.2%) is below the minimum investors require (9.1%). 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