Prosperity Bancshares (PB) AI Stock Analysis

• Market Cap: $7.04B
• Dividend Yield: 3.14%
• Average Volume (3M): 671.13K
• Price to Earnings (P/E): 14.1
• Beta (1Y): 0.79
• Revenue Growth: 9.02%
• EPS Growth: 20.88%
• Country: US
• Employees: 3,898
• Sector: Financial
• Sector Strength: 82
• Industry: Banks - Regional
• EPS (TTM): 1.37
• Shares Outstanding: 95,283,000
• 10 Day Avg. Volume: 891,485
• 30 Day Avg. Volume: 671,130
• PEG Ratio: -8.14
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.75
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 0.95
• Enterprise Value/Gross Profit: 5.27
• Enterprise Value/Ebitda: 2.45
• 1Y Price Target: $81.78
• Price Target Upside: 10.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 74 Outperform
• Price Target: $77.00 ▲(4.25%Upside)

Prosperity Bancshares demonstrates strong financial health with robust profitability and a solid balance sheet. While technical indicators show mixed signals, the stock's reasonable valuation and positive earnings call sentiment contribute to an overall positive outlook. Leadership stability through recent corporate events further supports the company's operational continuity.

Positive Factors

Credit Strength

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

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 Concerns

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

Loan Growth Headwind

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 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 shows strong profitability with a high net profit margin of 29.0% and a solid balance sheet characterized by a low debt-to-equity ratio of 0.03. However, inconsistent revenue growth and negative free cash flow growth pose some challenges.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.77B	1.18B	1.07B	1.20B	1.15B	1.24B
Gross Profit	1.17B	1.14B	1.05B	1.11B	1.10B	1.10B
EBITDA	673.00M	647.39M	565.42M	694.47M	689.30M	676.43M
Net Income	499.19M	479.39M	419.32M	524.52M	519.30M	528.90M
Balance Sheet
Total Assets	38.76B	39.57B	38.55B	37.69B	37.83B	34.06B
Cash, Cash Equivalents and Short-Term Investments	2.03B	12.95B	458.41M	880.63M	3.06B	1.99B
Total Debt	216.09M	3.42B	3.73B	1.85B	497.50M	389.58M
Total Liabilities	31.25B	32.13B	31.47B	30.99B	31.41B	27.93B
Stockholders Equity	7.52B	7.44B	7.08B	6.70B	6.43B	6.13B
Cash Flow
Free Cash Flow	442.44M	451.55M	612.20M	464.11M	675.71M	560.18M
Operating Cash Flow	470.37M	477.73M	646.36M	506.53M	694.73M	582.32M
Investing Cash Flow	2.04B	1.98B	1.09B	-1.96B	-2.72B	-1.27B
Financing Cash Flow	-1.89B	-940.22M	-1.71B	-666.75M	3.23B	1.46B

Prosperity Bancshares Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 73.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 73.86 is above the 20-day moving average (MA) of 69.65, above the 50-day MA of 69.53, and above the 200-day MA of 72.70, indicating a bullish trend. The MACD of 0.90 indicates Negative momentum. The RSI at 69.34 is Neutral, neither overbought nor oversold. The STOCH value of 94.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PB.

Prosperity Bancshares Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WTFC	82 Outperform	$8.83B	13.04	11.58%	1.52%	7.10%	4.65%
BOKF	77 Outperform	$6.62B	11.81	10.17%	2.21%	6.58%	26.56%
ZION	76 Outperform	$8.19B	10.81	13.06%	3.10%	4.84%	28.90%
PNFP	75 Outperform	$9.14B	19.05	7.77%	0.81%	8.08%	-11.31%
PB	74 Outperform	$7.04B	14.11	6.83%	3.14%	9.02%	20.88%
UMBF	72 Outperform	$8.38B	13.87	8.33%	1.45%	20.70%	5.69%
Sector *	61 Neutral	C$14.67B	6.14	20.17%	5.70%	26.93%	-38.21%

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.