TCPC
BlackRock TCP Capital Corp.
$4.01
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.7% below fair value
You pay
$4.01
Bear
$4.12
Fair
$5.88
Bull
$7.64
Bear
$4.12
+2.5%
ROTCE 4.0% → 0.30x TBV
Fair
$5.88
+46.5%
ROTCE -14.9% → 0.30x TBV
Bull
$7.64
+90.4%
ROTCE -17.1% → 0.30x TBV
Adjust Assumptions
-14.9%
10.1%
Key Value Driver
ROTCE (-14.9%) vs. cost of equity (10.1%)
Implied Market Multiple
0.56x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$4.00
Divergence from AlphaVal
47%
Summary
With ROTCE of -14.9% vs. 10.1% cost of equity, fair P/TBV is 0.30x on $7.13 tangible book, implying $5.88 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 (-14.9%) is below the minimum investors require (10.1%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $4.00 (from 13 analysts). Our estimate is 47% 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