PPBI
Pacific Premier Bancorp, Inc.
$24.49
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 0.3% below fair value
You pay
$24.49
Bear
$17.19
Fair
$24.56
Bull
$31.93
Bear
$17.19
-29.8%
ROTCE 5.9% → 0.30x TBV
Fair
$24.56
+0.3%
ROTCE 7.9% → 0.58x TBV
Bull
$31.93
+30.4%
ROTCE 9.0% → 0.76x TBV
Key Value Driver
ROTCE (7.9%) vs. cost of equity (10.7%)
Implied Market Multiple
1.17x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $32.67 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $24.56 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.
Return on equity (7.9%) is below the minimum investors require (10.7%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $14.23 (37% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $32.67 (from 14 analysts). Our estimate is 31% 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