NMIH
NMI Holdings, Inc.
$40.71
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 63.9% below fair value
You pay
$40.71
Bear
$74.66
Fair
$112.72
Bull
$134.22
Bear
$74.66
+83.4%
ROTCE 11.6% → 2.22x TBV
Fair
$112.72
+176.9%
ROTCE 15.4% → 3.36x TBV
Bull
$134.22
+229.7%
ROTCE 17.7% → 4.00x TBV
Adjust Assumptions
15.4%
7.4%
Key Value Driver
ROTCE (15.4%) vs. cost of equity (7.4%)
Implied Market Multiple
1.21x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (20 analysts)
$49.50
Divergence from AlphaVal
128%
Summary
With ROTCE of 15.4% vs. 7.4% cost of equity, fair P/TBV is 3.36x on $33.56 tangible book, implying $112.72 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 128% 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