TIPT
Tiptree Inc.
$18.36
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 119.6% above fair value
You pay
$18.36
Bear
$5.85
Fair
$8.36
Bull
$10.87
Bear
$5.85
-68.1%
ROTCE 4.0% → 0.30x TBV
Fair
$8.36
-54.5%
ROTCE -7.7% → 0.30x TBV
Bull
$10.87
-40.8%
ROTCE -8.8% → 0.30x TBV
Key Value Driver
ROTCE (-7.7%) vs. cost of equity (9.4%)
Implied Market Multiple
1.36x
Summary
With ROTCE of -7.7% vs. 9.4% cost of equity, fair P/TBV is 0.30x on $13.54 tangible book, implying $8.36 per share. DDM cross-check: $27.20.
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 (-7.7%) is below the minimum investors require (9.4%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $27.20 (225% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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