TREE
LendingTree, Inc.
$36.42
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 63.8% below fair value
You pay
$36.42
Bear
$70.40
Fair
$100.57
Bull
$130.75
Bear
$70.40
+93.3%
ROTCE 20.0% → 1.60x TBV
Fair
$100.57
+176.2%
ROTCE 25.0% → 4.00x TBV
Bull
$130.75
+259.0%
ROTCE 30.0% → 2.60x TBV
Key Value Driver
ROTCE (52.8%) vs. cost of equity (14.0%)
Implied Market Multiple
1.77x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $69.00 from 23 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $100.57 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 61% 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