OZK
Bank OZK
$44.36
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 49.6% below fair value
You pay
$44.36
Bear
$61.63
Fair
$88.05
Bull
$114.47
Bear
$61.63
+38.9%
ROTCE 9.8% → 1.10x TBV
Fair
$88.05
+98.5%
ROTCE 13.1% → 1.72x TBV
Bull
$114.47
+158.0%
ROTCE 15.0% → 2.09x TBV
Adjust Assumptions
13.1%
9.3%
Key Value Driver
ROTCE (13.1%) vs. cost of equity (9.3%)
Implied Market Multiple
0.89x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$56.00
Divergence from AlphaVal
57%
Summary
With ROTCE of 13.1% vs. 9.3% cost of equity, fair P/TBV is 1.72x on $50.10 tangible book, implying $88.05 per share. DDM cross-check: $281.67.
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.
Dividend-based valuation: $281.67 (220% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $56.00 (from 22 analysts). Our estimate is 57% 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