TRUP
Trupanion, Inc.
$25.83
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 104.5% above fair value
You pay
$25.83
Bear
$8.83
Fair
$12.63
Bull
$16.43
Bear
$8.83
-65.8%
ROTCE 4.5% → 0.30x TBV
Fair
$12.63
-51.1%
ROTCE 6.1% → 0.30x TBV
Bull
$16.43
-36.4%
ROTCE 7.0% → 0.37x TBV
Key Value Driver
ROTCE (6.1%) vs. cost of equity (12.0%)
Implied Market Multiple
3.52x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $35.67 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $12.63 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 (6.1%) is below the minimum investors require (12.0%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $35.67 (from 15 analysts). Our estimate is 86% 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