HIPO
Hippo Holdings Inc.
$35.28
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 88.5% above fair value
You pay
$35.28
Bear
$12.54
Fair
$18.72
Bull
$22.43
Bear
$12.54
-64.5%
ROTCE 12.3% → 0.94x TBV
Fair
$18.72
-46.9%
ROTCE 16.5% → 1.41x TBV
Bull
$22.43
-36.4%
ROTCE 18.9% → 1.69x TBV
Adjust Assumptions
16.5%
12.8%
Key Value Driver
ROTCE (16.5%) vs. cost of equity (12.8%)
Implied Market Multiple
2.65x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$28.38
Divergence from AlphaVal
34%
Summary
With ROTCE of 16.5% vs. 12.8% cost of equity, fair P/TBV is 1.41x on $13.29 tangible book, implying $18.72 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 $28.38 (from 6 analysts). Our estimate is 34% 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