NMIH
NMI Holdings, Inc.
$44.35
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 62.0% below fair value
You pay
$44.35
Bear
$77.30
Fair
$116.70
Bull
$132.89
Bear
$77.30
+74.3%
ROTCE 11.6% → 2.33x TBV
Fair
$116.70
+163.1%
ROTCE 15.4% → 3.51x TBV
Bull
$132.89
+199.6%
ROTCE 17.7% → 4.00x TBV
Adjust Assumptions
15.4%
7.2%
Key Value Driver
ROTCE (15.4%) vs. cost of equity (7.2%)
Implied Market Multiple
1.33x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (20 analysts)
$49.50
Divergence from AlphaVal
136%
Summary
With ROTCE of 15.4% vs. 7.2% cost of equity, fair P/TBV is 3.51x on $33.22 tangible book, implying $116.70 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 $49.50 (from 20 analysts). Our estimate is 136% above 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