TIPT
Tiptree Inc.
$17.25
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 106.3% above fair value
You pay
$17.25
Bear
$5.85
Fair
$8.36
Bull
$10.87
Bear
$5.85
-66.1%
ROTCE 4.0% → 0.30x TBV
Fair
$8.36
-51.5%
ROTCE -7.7% → 0.30x TBV
Bull
$10.87
-37.0%
ROTCE -8.8% → 0.30x TBV
Adjust Assumptions
-7.7%
9.5%
Key Value Driver
ROTCE (-7.7%) vs. cost of equity (9.5%)
Implied Market Multiple
1.26x
Summary
With ROTCE of -7.7% vs. 9.5% cost of equity, fair P/TBV is 0.30x on $13.66 tangible book, implying $8.36 per share. DDM cross-check: $23.90.
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 (9.5%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $23.90 (186% 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