Prosperity Bancshares (PB) AI Stock Analysis

• Market Cap: $6.66B
• Dividend Yield: 3.35%
• Average Volume (3M): 717.63K
• Price to Earnings (P/E): 13.4
• Beta (1Y): 0.81
• Revenue Growth: 9.03%
• EPS Growth: 20.88%
• Country: US
• Employees: 3,898
• Sector: Financial
• Sector Strength: 85
• Industry: Banks - Regional
• EPS (TTM): 5.23
• Shares Outstanding: 95,262,720
• 10 Day Avg. Volume: 776,639
• 30 Day Avg. Volume: 717,626
• PEG Ratio: 0.64
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.94
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $81.63
• Price Target Upside: 16.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

Prosperity Bancshares displays strong financial performance and robust profitability, supported by strategic leadership stability. However, technical indicators suggest a bearish trend, and the company faces challenges with increasing debt and cash flow management. The stock's valuation is fair, with a decent dividend yield appealing to income investors. Cautious optimism is advised given the mixed signals from technical analysis and corporate events.

Positive Factors

Financial Flexibility

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 (NIM) Expansion

Prosperity Bancshares is expected to generate some of the largest net interest margin expansion among peers, driven by asset repricing.

Negative Factors

Loan Growth Concerns

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

Loan Growth Headwinds

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. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. As of December 31, 2021, the company operated 273 full-service banking locations comprising 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 63 in the Dallas/Fort Worth, Texas area; 22 in the East Texas area; 29 in the Central Texas area, including Austin and San Antonio; 34 in the West Texas area, including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area doing business as LegacyTexas Bank. Prosperity Bancshares, Inc. was founded in 1983 and is based in Houston, Texas.

How the Company Makes Money

Prosperity Bancshares generates revenue primarily through interest income from loans and securities, as well as non-interest income from service charges and fees on deposit accounts. The bank's loan portfolio includes commercial and industrial loans, real estate loans, and consumer loans, which are the main drivers of interest income. Additionally, the bank earns income from investments in securities. Non-interest revenue is derived from various banking services such as transaction fees, trust services, and other ancillary financial products. The company's performance is also influenced by strategic acquisitions and its ability to maintain a strong local presence in its operating regions.

Prosperity Bancshares Financial Statement Overview

Summary

Prosperity Bancshares shows strong profitability and equity growth, with notable net income improvements. However, challenges with increasing debt and declining free cash flow pose risks. Addressing these issues is crucial for sustainable growth.

Income Statement

The income statement shows a strong net income with a net profit margin improvement from the previous year, indicating good profitability. However, the negative EBIT in the latest year is concerning, likely due to high operating expenses impacting profitability. Revenue growth has been inconsistent, reflecting potential volatility in revenue streams.

Balance Sheet

The balance sheet is robust with a healthy debt-to-equity ratio, indicating manageable leverage. Stockholders' equity has steadily increased, contributing to a solid equity ratio. However, the total debt has increased significantly compared to earlier years, which could pose future risks if not controlled.

Cash Flow

The cash flow statement shows a decline in free cash flow, with a negative growth rate from the previous year, suggesting potential cash management issues. Operating cash flow remains positive and sufficient to cover net income, which is a positive sign. However, the decrease in free cash flow to net income ratio indicates decreasing cash efficiency.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.62B	1.07B	1.11B	1.10B	1.12B
	Gross Profit
1.62B	1.60B	1.11B	1.10B	1.12B
	EBIT
-1.24B	691.28M	755.78M	659.65M	645.03M
	EBITDA
0.00	0.00	694.47M	689.30M	676.43M
	Net Income Common Stockholders
479.39M	419.32M	524.52M	519.30M	528.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.31B	458.41M	880.33M	3.06B	1.99B
	Total Assets
39.57B	38.55B	37.69B	37.83B	34.06B
	Total Debt
3.20B	3.73B	1.85B	497.50M	446.58M
	Net Debt
1.23B	3.27B	1.43B	-2.05B	-896.41M
	Total Liabilities
32.13B	31.47B	30.99B	1.26M	3.46M
	Stockholders Equity
7.44B	7.08B	6.70B	6.43B	6.13B
Cash Flow		Free Cash Flow
351.85M	612.20M	464.11M	675.71M	560.18M
	Operating Cash Flow
351.85M	646.36M	506.53M	694.73M	582.32M
	Investing Cash Flow
-63.25M	1.09B	-1.96B	-2.72B	-1.27B
	Financing Cash Flow
-289.14M	-1.71B	-666.75M	3.23B	1.46B

Prosperity Bancshares Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 69.89
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PB, the sentiment is Neutral. The current price of 69.89 is above the 20-day moving average (MA) of 66.42, above the 50-day MA of 69.84, and below the 200-day MA of 73.13, indicating a neutral trend. The MACD of -0.30 indicates Negative momentum. The RSI at 57.76 is Neutral, neither overbought nor oversold. The STOCH value of 82.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PB.

Prosperity Bancshares Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PNFP	78 Outperform	$6.97B	15.10	7.77%	0.90%	8.09%	-11.31%
WTFC	75 Outperform	$7.54B	11.14	11.58%	1.66%	6.79%	4.65%
UMBF	72 Outperform	$7.10B	12.29	8.33%	1.67%	20.50%	5.69%
PB	70 Outperform	$6.66B	13.35	6.83%	3.35%	9.03%	20.88%
ZION	69 Neutral	$6.69B	8.84	13.10%	3.70%	4.84%	29.25%
BOKF	68 Neutral	$6.17B	10.99	10.19%	2.39%	6.47%	26.85%
Sector *	64 Neutral	$12.65B	9.74	8.04%	17044.64%	12.65%	-5.11%

Prosperity Bancshares Corporate Events

Prosperity Bancshares Secures Leadership with New Agreement

On April 15, 2025, Prosperity Bancshares, Inc. entered into an employment and change in control agreement with Kevin J. Hanigan, the President and COO of the company. The agreement outlines Mr. Hanigan’s compensation, including a base salary and eligibility for bonuses, and details the conditions under which he would receive severance payments in the event of termination. This agreement is significant as it secures leadership stability and outlines financial commitments in the event of a change in control, impacting the company’s operational continuity and stakeholder interests.

Spark’s Take on PB Stock

According to Spark, TipRanks’ AI Analyst, PB is a Outperform.

Prosperity Bancshares’ score reflects a strong financial performance with robust net income growth and improved efficiency highlighted in the recent earnings call. However, technical analysis points to a bearish trend, and increasing debt levels require careful management. The stock’s valuation is fair, with a good dividend yield offering appeal to income-seeking investors.

To see Spark’s full report on PB stock, click here.