MODEL VERDICT
Ambac Financial Group, Inc. (AMBC)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Industry Median P/E 15 industry peers | $14.67 | +139.3% | 30% | A | Peer Data |
| Price / Book 18 industry peers | $34.70 | +466.1% | 25% | B | Model Driven |
| Forward P/E 17 analyst estimates | $0.74 | -87.9% | 15% | A- | Analyst Est. |
| Earnings Yield 15 industry peers | $14.67 | +139.3% | 8% | B | Data |
| Price / Tangible Book 16 bank peers | $11.78 | +92.2% | 5% | B+ | Bank Primary |
| Price / Sales 19 industry peers | $4.17 | -32.0% | 4% | B | Model Driven |
| Weighted Output Blended model output | $18.26 | +197.8% | 100% | 74 | SIGNIFICANTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 4× (Current) | 4× | 4× | 6× | 8× |
|---|---|---|---|---|---|
| Bear Case (4%) | $6 | $6 | $6 | $9 | $12 |
| Conservative (7%) | $6 | $6 | $6 | $9 | $12 |
| Base Case (10.0%) | $6 | $6 | $6 | $9 | $12 |
| Bull Case (14%) | $6 | $6 | $6 | $10 | $13 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 27.60 | 5.96 | 1.54 | 96.94 | 46.34 |
| EV/EBIT | 50.78 | 37.97 | 17.35 | 97.01 | 41.35 |
| EV/EBITDA | 75.34 | 74.49 | 23.40 | 128.14 | 52.38 |
| P/FCF | 265.03 | 11.50 | 3.83 | 779.75 | 445.78 |
| P/FFO | 24.29 | 12.55 | 1.54 | 86.55 | 35.54 |
| P/TBV | 0.95 | 0.89 | 0.59 | 1.37 | 0.24 |
| P/B Ratio | 0.58 | 0.61 | 0.49 | 0.67 | 0.07 |
| P/S Ratio | 4.99 | 3.02 | 1.58 | 15.10 | 4.73 |
Based on our peer multiples analysis with 17 valuation metrics, the model estimates AMBC's fair value at $18.26 vs the current price of $6.13, implying +197.8% upside potential. Model verdict: Significantly Undervalued. Confidence: 74/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $18.26 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $11.72 (P10) to $31.96 (P90), with a median of $18.83.
AMBC's current P/E of 4.3x compares to the industry median of 10.3x (15 peers in the group). This represents a -58.2% discount to the industry. The historical average P/E is 27.6x over 4 years. Signal: Deep Discount.
6 analysts cover AMBC with a consensus rating of Buy. The consensus price target is $14.00 (range: $10.00 — $18.00), implying +128.4% upside from the current price. Grade breakdown: Strong Buy (0), Buy (5), Hold (1), Sell (0), Strong Sell (0).
The model confidence score is 74/100, based on: data completeness (21), peer quality (25), historical depth (20), earnings stability (4), and model agreement (4). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk data is not available for AMBC.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.