VRTS
Virtus Investment Partners, Inc.
$144.40
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 63.5% below fair value
You pay
$144.40
Bear
$276.85
Fair
$395.50
Bull
$514.15
Bear
$276.85
+91.7%
ROTCE 20.0% → 2.02x TBV
Fair
$395.50
+173.9%
ROTCE 25.0% → 4.00x TBV
Bull
$514.15
+256.1%
ROTCE 30.0% → 3.29x TBV
Key Value Driver
ROTCE (66.0%) vs. cost of equity (11.9%)
Implied Market Multiple
4.6x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $135.67 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $395.50 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 $135.67 (from 11 analysts). Our estimate is 239% 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