PRG
PROG Holdings, Inc.
$44.51
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 39.2% below fair value
You pay
$44.51
Bear
$51.25
Fair
$73.21
Bull
$95.17
Bear
$51.25
+15.2%
ROTCE 20.0% → 1.60x TBV
Fair
$73.21
+64.5%
ROTCE 25.0% → 3.34x TBV
Bull
$95.17
+113.8%
ROTCE 30.0% → 2.60x TBV
Key Value Driver
ROTCE (37.4%) vs. cost of equity (14.0%)
Implied Market Multiple
4.54x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $50.13 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $73.21 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.
Wall Street's average price target is $50.13 (from 8 analysts). Our estimate is 58% 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