LPRO
Open Lending Corporation
$3.14
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 3.1% below fair value
You pay
$3.14
Bear
$2.27
Fair
$3.24
Bull
$4.21
Bear
$2.27
-27.8%
ROTCE 4.0% → 0.30x TBV
Fair
$3.24
+3.2%
ROTCE -6.0% → 0.30x TBV
Bull
$4.21
+34.1%
ROTCE -6.9% → 0.30x TBV
Adjust Assumptions
-6.0%
14.0%
Key Value Driver
ROTCE (-6.0%) vs. cost of equity (14.0%)
Implied Market Multiple
5.24x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$3.15
Divergence from AlphaVal
3%
Summary
With ROTCE of -6.0% vs. 14.0% cost of equity, fair P/TBV is 0.30x on $0.60 tangible book, implying $3.24 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 (-6.0%) is below the minimum investors require (14.0%). 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