PRG
PROG Holdings, Inc.
$30.58
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 61.3% below fair value
You pay
$30.58
Bear
$55.29
Fair
$78.98
Bull
$102.67
Bear
$55.29
+80.8%
ROTCE 20.0% → 1.60x TBV
Fair
$78.98
+158.3%
ROTCE 25.0% → 2.10x TBV
Bull
$102.67
+235.8%
ROTCE 30.0% → 2.60x TBV
Adjust Assumptions
37.4%
14.0%
Key Value Driver
ROTCE (37.4%) vs. cost of equity (14.0%)
Implied Market Multiple
3.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$47.50
Divergence from AlphaVal
66%
Summary
With ROTCE of 37.4% vs. 14.0% cost of equity, fair P/TBV is 2.10x on $9.86 tangible book, implying $78.98 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 $47.50 (from 9 analysts). Our estimate is 66% 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