PRAA
PRA Group, Inc.
$20.04
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 1.8% above fair value
You pay
$20.04
Bear
$13.78
Fair
$19.69
Bull
$25.60
Bear
$13.78
-31.2%
ROTCE 4.0% → 0.30x TBV
Fair
$19.69
-1.7%
ROTCE -32.0% → 0.30x TBV
Bull
$25.60
+27.7%
ROTCE -36.8% → 0.30x TBV
Adjust Assumptions
-32.0%
10.5%
Key Value Driver
ROTCE (-32.0%) vs. cost of equity (10.5%)
Implied Market Multiple
0.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$25.00
Divergence from AlphaVal
21%
Summary
With ROTCE of -32.0% vs. 10.5% cost of equity, fair P/TBV is 0.30x on $24.99 tangible book, implying $19.69 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 (-32.0%) is below the minimum investors require (10.5%). This means the bank is worth less than the net assets on its books.
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