LADR
Ladder Capital Corp
$10.04
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 5.3% below fair value
You pay
$10.04
Bear
$7.43
Fair
$10.61
Bull
$13.80
Bear
$7.43
-26.0%
ROTCE 4.0% → 0.30x TBV
Fair
$10.61
+5.7%
ROTCE 4.7% → 0.30x TBV
Bull
$13.80
+37.4%
ROTCE 5.4% → 0.30x TBV
Key Value Driver
ROTCE (4.7%) vs. cost of equity (9.8%)
Implied Market Multiple
0.94x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $13.00 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $10.61 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 (4.7%) is below the minimum investors require (9.8%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $12.66 (29% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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