HOPE
Hope Bancorp, Inc.
$14.12
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 4.7% above fair value
You pay
$14.12
Bear
$9.43
Fair
$13.48
Bull
$17.52
Bear
$9.43
-33.2%
ROTCE 4.0% → 0.30x TBV
Fair
$13.48
-4.5%
ROTCE 3.3% → 0.30x TBV
Bull
$17.52
+24.1%
ROTCE 3.8% → 0.30x TBV
Key Value Driver
ROTCE (3.3%) vs. cost of equity (8.7%)
Implied Market Multiple
1.03x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $16.00 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $13.48 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.
Return on equity (3.3%) is below the minimum investors require (8.7%). 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