LOB - Live Oak Bancshares, Inc.
Price:
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CONSENSUS:
Buy
DETAILS
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PRICE TARGET:
$41.50
DETAILS
HIGH:
$45.00
LOW:
$38.00
MEDIAN:
$41.50
CONSENSUS:
$41.50
UPSIDE:
19.72%
AlphaVal
Deterministic, archetype-aware fair value
Banks, Insurers & Asset Managers
85% confidence
Primary model: P/Tangible Book × ROE Quality
Adjust Assumptions
8.3%
14.0%
Key Value Driver
ROTCE (8.3%) vs. cost of equity (14.0%)
Implied Market Multiple
1.28x
Plain-Language Summary
With ROTCE of 8.3% vs. 14.0% cost of equity, fair P/TBV is 0.43x on $27.02 tangible book, implying $24.42 per share.
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above -- shown only as an outside comparison.
Average Target (10 analysts)
$41.50
Analyst Range
$38.00 – $45.00
Divergence from AlphaVal
41%
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 (8.3%) is below the minimum investors require (14.0%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $41.50 (from 10 analysts). Our estimate is 41% 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