UNTY
Unity Bancorp, Inc.
$58.23
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 48.4% below fair value
You pay
$58.23
Bear
$75.89
Fair
$112.90
Bull
$135.12
Bear
$75.89
+30.3%
ROTCE 12.6% → 2.21x TBV
Fair
$112.90
+93.9%
ROTCE 16.8% → 3.29x TBV
Bull
$135.12
+132.0%
ROTCE 19.4% → 3.94x TBV
Adjust Assumptions
16.8%
7.9%
Key Value Driver
ROTCE (16.8%) vs. cost of equity (7.9%)
Implied Market Multiple
1.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (5 analysts)
$68.00
Divergence from AlphaVal
66%
Summary
With ROTCE of 16.8% vs. 7.9% cost of equity, fair P/TBV is 3.29x on $34.27 tangible book, implying $112.90 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 $68.00 (from 5 analysts). Our estimate is 66% 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