TREE
LendingTree, Inc.
$24.41
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 43.4% below fair value
You pay
$24.41
Bear
$32.89
Fair
$43.16
Bull
$53.44
Bear
$32.89
+34.7%
ROTCE 20.0% → 1.60x TBV
Fair
$43.16
+76.8%
ROTCE 25.0% → 2.10x TBV
Bull
$53.44
+118.9%
ROTCE 30.0% → 2.60x TBV
Adjust Assumptions
52.8%
14.0%
Key Value Driver
ROTCE (52.8%) vs. cost of equity (14.0%)
Implied Market Multiple
1.19x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (23 analysts)
$69.00
Divergence from AlphaVal
37%
Summary
With ROTCE of 52.8% vs. 14.0% cost of equity, fair P/TBV is 2.10x on $20.55 tangible book, implying $43.16 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 $69.00 (from 23 analysts). Our estimate is 37% 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