Prosperity Bancshares (PB) AI Stock Analysis

• Market Cap: $6.44B
• Dividend Yield: 3.4%
• Average Volume (3M): 740.21K
• Price to Earnings (P/E): 12.3
• Beta (1Y): 0.76
• Revenue Growth: 3.66%
• EPS Growth: 20.33%
• Country: US
• Employees: 3,898
• Sector: Financial
• Sector Strength: 73
• Industry: Banks - Regional
• EPS (TTM): 1.42
• Shares Outstanding: 95,277,000
• 10 Day Avg. Volume: 771,030
• 30 Day Avg. Volume: 740,209
• PEG Ratio: 0.04
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.97
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 0.92
• Enterprise Value/Gross Profit: 5.43
• Enterprise Value/Ebitda: 2.53
• 1Y Price Target: $83.13
• Price Target Upside: 22.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 70 Neutral
• Price Target: $74.00 ▲(9.31%Upside)

Prosperity Bancshares has a strong financial foundation with solid profitability and efficient management. The earnings call provided positive insights with growth in net income and strategic expansion plans through the merger. However, technical indicators suggest caution with current bearish trends. Valuation metrics appear reasonable, supported by a good dividend yield.

Positive Factors

Credit Quality

Credit remains pristine with 0 provisions and robust capital levels, providing management with flexibility for M&A or share repurchases.

Mergers and Acquisitions

The company has a high-quality loan portfolio and an improved backdrop for mergers and acquisitions, which are considered strengths in the current macroeconomic environment.

Net Interest Margin Expansion

Prosperity Bancshares is uniquely positioned to generate meaningful NIM expansion across any macro backdrop due to asset repricing.

Negative Factors

Loan Growth

Growth questions remain due to low-single digit loan growth guidance, limiting upside without a deal announcement.

Loan Portfolio

Loan growth remains a headwind with EOP balances down by another 1.0% Q/Q, but management was incrementally positive on the call that activity should begin to pick up.

Prosperity Bancshares Business Overview & Revenue Model

Company Description

Prosperity Bancshares, Inc. is a financial holding company headquartered in Houston, Texas. It operates through its wholly-owned subsidiary, Prosperity Bank, providing a comprehensive range of financial products and services to individuals and businesses. The core offerings of Prosperity Bank include traditional banking services such as savings and checking accounts, commercial and consumer loans, mortgage services, wealth management, and treasury management services. The bank primarily serves the Texas and Oklahoma regions, focusing on community-oriented banking with an emphasis on customer service and local decision-making.

How the Company Makes Money

Prosperity Bancshares makes money primarily through the interest income generated from its loan portfolio, which includes commercial loans, consumer loans, and real estate lending. The bank earns interest by charging borrowers a higher rate than it pays depositors, creating a net interest margin. Additionally, the bank generates revenue through non-interest income sources, such as service charges on deposit accounts, gains from the sale of loans, wealth management and trust fees, and other banking-related fees. The bank's profitability is also supported by its strategic focus on maintaining a strong asset quality and efficient cost management, which helps optimize its operational efficiency.

Prosperity Bancshares Financial Statement Overview

Summary

The company demonstrates solid financial health with strong profitability and efficient balance sheet management. Despite challenges in revenue growth and free cash flow generation, core operations remain robust, supported by low leverage and a strong equity position.

Income Statement

The income statement shows a steady revenue base with a TTM gross profit margin of 67.7% and a net profit margin of 29.0%. The revenue growth has been inconsistent, with a decline from 2024 to TTM, but overall profitability remains strong due to solid EBIT and EBITDA margins.

Balance Sheet

The balance sheet reflects a robust financial position with a low debt-to-equity ratio of 0.03 and a strong equity ratio of 19.4% for TTM. The return on equity is commendable at 6.6%, indicating efficient use of shareholder funds. The company's ability to manage its liabilities is noteworthy.

Cash Flow

The cash flow statement reveals stable operating cash flow with an operating cash flow to net income ratio of 0.94 for TTM. However, the free cash flow growth has been negative in recent periods, which could pose a future risk. The free cash flow to net income ratio remains healthy, showing good cash generation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.74B	1.56B	1.20B	1.15B	1.24B
Gross Profit	1.14B	1.05B	1.11B	1.10B	1.10B
EBITDA	647.39M	565.42M	694.47M	689.30M	676.43M
Net Income	479.39M	419.32M	524.52M	519.30M	528.90M
Balance Sheet
Total Assets	39.57B	38.55B	37.69B	37.83B	34.06B
Cash, Cash Equivalents and Short-Term Investments	12.95B	896.74M	880.33M	3.06B	1.99B
Total Debt	3.42B	4.03B	4.13B	448.10M	389.58M
Total Liabilities	32.13B	31.47B	30.99B	31.41B	27.93B
Stockholders Equity	7.44B	7.08B	6.70B	6.43B	6.13B
Cash Flow
Free Cash Flow	451.55M	612.20M	464.11M	675.71M	560.18M
Operating Cash Flow	472.69M	646.36M	506.53M	694.73M	582.32M
Investing Cash Flow	1.98B	1.09B	-1.96B	-2.72B	-1.27B
Financing Cash Flow	-940.22M	-1.71B	-666.75M	3.23B	1.46B

Prosperity Bancshares Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 67.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PB, the sentiment is Negative. The current price of 67.7 is below the 20-day moving average (MA) of 72.55, below the 50-day MA of 70.71, and below the 200-day MA of 72.89, indicating a bearish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 35.21 is Neutral, neither overbought nor oversold. The STOCH value of 15.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PB.

Prosperity Bancshares Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WTFC	81 Outperform	$8.89B	12.81	11.60%	1.44%	4.30%	10.10%
BOKF	78 Outperform	$6.82B	12.79	9.57%	2.15%	-0.77%	17.19%
ZION	77 Outperform	$8.14B	10.32	13.28%	3.08%	2.64%	32.56%
UMBF	72 Outperform	$8.20B	13.58	8.33%	1.47%	20.70%	5.69%
PB	70 Neutral	$6.44B	12.32	7.02%	3.40%	3.66%	20.33%
PNFP	68 Neutral	$8.08B	14.18	9.32%	1.00%	10.19%	48.39%
Sector *	68 Neutral	$17.10B	11.19	9.70%	3.58%	11.11%	-4.55%

Prosperity Bancshares Corporate Events

Prosperity Bancshares Announces Merger with American Bank

On July 18, 2025, Prosperity Bancshares announced a definitive merger agreement to acquire American Bank Holding Corporation, a Texas-based bank holding company. The merger, expected to close in late 2025 or early 2026, will involve converting American’s stock into shares of Prosperity common stock, subject to regulatory and shareholder approvals. This acquisition aims to enhance Prosperity’s footprint in key Texas markets, including Corpus Christi and San Antonio, and leverage American’s established wealth management business.

The most recent analyst rating on (PB) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on Prosperity Bancshares stock, see the PB Stock Forecast page.