WT
WisdomTree, Inc.
$21.76
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 153.6% above fair value
You pay
$21.76
Bear
$6.39
Fair
$8.58
Bull
$11.15
Bear
$6.39
-70.6%
ROTCE 19.8% → 2.34x TBV
Fair
$8.58
-60.6%
ROTCE 25.0% → 3.11x TBV
Bull
$11.15
-48.7%
ROTCE 30.0% → 3.85x TBV
Adjust Assumptions
26.4%
10.7%
Key Value Driver
ROTCE (26.4%) vs. cost of equity (10.7%)
Implied Market Multiple
7.97x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$26.05
Divergence from AlphaVal
67%
Summary
With ROTCE of 26.4% vs. 10.7% cost of equity, fair P/TBV is 3.11x on $2.73 tangible book, implying $8.58 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 $26.05 (from 17 analysts). Our estimate is 67% 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