PLMR
Palomar Holdings, Inc.
$136.75
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 5.1% above fair value
Bear
$130.15
-4.8%
ROTCE 17.1% → 4.00x TBV
Fair
$130.15
-4.8%
ROTCE 22.9% → 4.00x TBV
Bull
$130.15
-4.8%
ROTCE 26.3% → 4.00x TBV
Adjust Assumptions
22.9%
6.2%
Key Value Driver
ROTCE (22.9%) vs. cost of equity (6.2%)
Implied Market Multiple
4.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$158.50
Divergence from AlphaVal
18%
Summary
With ROTCE of 22.9% vs. 6.2% cost of equity, fair P/TBV is 4.00x on $32.54 tangible book, implying $130.15 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.
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