PLMR
Palomar Holdings, Inc.
$133.35
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 1.8% below fair value
Bear
$135.82
+1.8%
ROTCE 17.1% → 4.00x TBV
Fair
$135.82
+1.8%
ROTCE 22.9% → 4.00x TBV
Bull
$135.82
+1.8%
ROTCE 26.3% → 4.00x TBV
Key Value Driver
ROTCE (22.9%) vs. cost of equity (6.5%)
Implied Market Multiple
4.1x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $158.50 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $135.82 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