NRDS
NerdWallet, Inc.
$9.26
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 1.0% below fair value
You pay
$9.26
Bear
$6.55
Fair
$9.35
Bull
$12.16
Bear
$6.55
-29.3%
ROTCE 15.9% → 1.69x TBV
Fair
$9.35
+1.0%
ROTCE 21.2% → 2.44x TBV
Bull
$12.16
+31.3%
ROTCE 24.4% → 2.89x TBV
Key Value Driver
ROTCE (21.2%) vs. cost of equity (11.1%)
Implied Market Multiple
2.94x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $13.33 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $9.35 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 $13.33 (from 6 analysts). Our estimate is 37% below 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