VRTS
Virtus Investment Partners, Inc.
$119.31
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 74.1% below fair value
You pay
$119.31
Bear
$322.32
Fair
$460.46
Bull
$598.60
Bear
$322.32
+170.2%
ROTCE 20.0% → 2.01x TBV
Fair
$460.46
+285.9%
ROTCE 25.0% → 2.64x TBV
Bull
$598.60
+401.7%
ROTCE 30.0% → 3.27x TBV
Adjust Assumptions
66.0%
12.0%
Key Value Driver
ROTCE (66.0%) vs. cost of equity (12.0%)
Implied Market Multiple
3.77x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$135.67
Divergence from AlphaVal
239%
Summary
With ROTCE of 66.0% vs. 12.0% cost of equity, fair P/TBV is 2.64x on $31.64 tangible book, implying $460.46 per share. DDM cross-check: $417.80.
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