HONE
HarborOne Bancorp, Inc.
$12.10
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 20.8% above fair value
You pay
$12.10
Bear
$7.01
Fair
$10.02
Bull
$13.03
Bear
$7.01
-42.1%
ROTCE 4.4% → 0.30x TBV
Fair
$10.02
-17.2%
ROTCE 5.8% → 0.44x TBV
Bull
$13.03
+7.6%
ROTCE 6.7% → 0.65x TBV
Key Value Driver
ROTCE (5.8%) vs. cost of equity (8.1%)
Implied Market Multiple
1.11x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $14.00 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $10.02 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 (5.8%) is below the minimum investors require (8.1%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $14.00 (from 6 analysts). Our estimate is 36% 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