VBTX
Veritex Holdings, Inc.
$30.26
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 38.7% above fair value
You pay
$30.26
Bear
$15.28
Fair
$21.82
Bull
$28.37
Bear
$15.28
-49.5%
ROTCE 6.9% → 0.48x TBV
Fair
$21.82
-27.9%
ROTCE 9.2% → 0.86x TBV
Bull
$28.37
-6.2%
ROTCE 10.6% → 1.08x TBV
Adjust Assumptions
9.2%
10.0%
Key Value Driver
ROTCE (9.2%) vs. cost of equity (10.0%)
Implied Market Multiple
1.42x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$30.33
Divergence from AlphaVal
28%
Summary
With ROTCE of 9.2% vs. 10.0% cost of equity, fair P/TBV is 0.86x on $21.33 tangible book, implying $21.82 per share. DDM cross-check: $12.67.
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 (9.2%) is below the minimum investors require (10.0%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $12.67 (42% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $30.33 (from 10 analysts). Our estimate is 28% 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