Waterstone Financial, Inc. logo WSBF - Waterstone Financial, Inc.

Price: -- -- | CONSENSUS: Hold DETAILS
STRONG
BUY 0
BUY 0
HOLD 2
SELL 0
STRONG
SELL 0
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Overvalued Mild
Trading 8.1% above fair value
Current Price $18.33
Bear Case $11.87 35.2% downside ($11.87 - $18.33) / $18.33 = -35.2% ROTCE 5.7% → 0.38x TBV
Fair Value $16.96 7.5% downside ($16.96 - $18.33) / $18.33 = -7.5% ROTCE 7.6% → 0.82x TBV
Bull Case $22.05 20.3% upside ($22.05 - $18.33) / $18.33 = 20.3% ROTCE 8.7% → 1.08x TBV

Adjust Assumptions

7.6%
8.3%

Key Value Driver

ROTCE (7.6%) vs. cost of equity (8.3%)

Implied Market Multiple 0.95x

Plain-Language Summary

With ROTCE of 7.6% vs. 8.3% cost of equity, fair P/TBV is 0.82x on $19.35 tangible book, implying $16.96 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.
⚠ Return on equity (7.6%) is below the minimum investors require (8.3%). This means the bank is worth less than the net assets on its books.

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