SFST
Southern First Bancshares, Inc.
$62.20
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 31.1% above fair value
You pay
$62.20
Bear
$33.21
Fair
$47.46
Bull
$61.70
Bear
$33.21
-46.6%
ROTCE 6.2% → 0.54x TBV
Fair
$47.46
-23.7%
ROTCE 8.2% → 1.05x TBV
Bull
$61.70
-0.8%
ROTCE 9.5% → 1.36x TBV
Key Value Driver
ROTCE (8.2%) vs. cost of equity (8.0%)
Implied Market Multiple
1.6x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $64.00 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $47.46 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 $64.00 (from 7 analysts). Our estimate is 32% 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