Prosperity Bancshares (PB) AI Stock Analysis

• Market Cap: $6.83B
• Dividend Yield: 3.25%
• Average Volume (3M): 877.42K
• Price to Earnings (P/E): 12.8
• Beta (1Y): 0.61
• Revenue Growth: 0.55%
• EPS Growth: 19.13%
• Country: US
• Employees: 3,898
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.45
• Shares Outstanding: 94,991,830
• 10 Day Avg. Volume: 1,017,219
• 30 Day Avg. Volume: 877,418
• PEG Ratio: 1.25
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 4.11
• P/FCF Ratio: 15.85
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 4.16
• Enterprise Value/Gross Profit: 5.95
• Enterprise Value/Ebitda: 8.53
• 1Y Price Target: $79.60
• Price Target Upside: 11.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 79 Outperform
• Price Target: $81.00 ▲(13.48% Upside)

Prosperity Bancshares exhibits strong technical momentum and a solid valuation, supported by strategic growth initiatives such as the merger with Southwest Bancshares. Financial performance is robust, though challenges in revenue growth and cash flow need addressing. The positive earnings call sentiment and attractive dividend yield further bolster the stock's appeal.

Positive Factors

Strategic Expansion

The merger with Southwest Bancshares expands Prosperity Bancshares' operations in Texas, enhancing market presence and long-term growth prospects.

Net Income Growth

Consistent net income growth reflects strong financial performance and operational efficiency, supporting long-term profitability.

Improved Net Interest Margin

Improved net interest margins indicate effective asset-liability management, enhancing revenue generation and financial stability.

Negative Factors

Decrease in Loan Balances

A decrease in loan balances may impact interest income and reflects challenges in maintaining lending growth amidst a competitive environment.

Increase in Nonperforming Assets

Rising nonperforming assets can strain financial resources and indicate potential credit quality issues, affecting long-term asset quality.

Competitive Lending Environment

A competitive lending environment may pressure margins and limit loan growth, challenging the company's ability to expand its loan portfolio.

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 interest-earning assets, which is the largest component of its revenue model. The bank provides various types of loans, including commercial, real estate, and consumer loans, earning interest from borrowers over the life of these loans. Additionally, the company earns non-interest income through service charges on deposit accounts, fees from wealth management services, and transaction fees from its treasury management services. Significant partnerships with local businesses and a focus on community banking also contribute to its growth and earnings, enhancing customer loyalty and expanding its deposit base.

Prosperity Bancshares Financial Statement Overview

Summary

Prosperity Bancshares demonstrates solid profitability and a strong capital structure, but faces challenges in revenue growth and cash flow conversion. The company is well-positioned in terms of leverage and equity, but needs to address declining revenue and cash flow trends to sustain long-term growth.

Income Statement

Prosperity Bancshares shows strong profitability with a consistent gross profit margin above 65% and a net profit margin around 30% in the TTM. However, revenue growth has been negative recently, indicating potential challenges in expanding revenue streams. The EBIT and EBITDA margins are healthy, reflecting efficient operations.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.41 in the TTM, indicating a balanced approach to leveraging. Return on equity is stable but slightly declining, suggesting moderate profitability from equity investments. The equity ratio is strong, showing a solid capital structure.

Cash Flow

Operating cash flow to net income ratio is low, indicating potential issues in converting income to cash. Free cash flow growth has been negative, which could impact future investments. However, the free cash flow to net income ratio remains high, suggesting good cash generation relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.72B	1.74B	1.56B	1.20B	1.15B	1.24B
Gross Profit	1.20B	1.14B	1.05B	1.11B	1.10B	1.10B
EBITDA	839.96M	647.39M	565.42M	694.47M	689.30M	676.43M
Net Income	533.01M	479.39M	419.32M	524.52M	519.30M	528.90M
Balance Sheet
Total Assets	38.33B	39.57B	38.55B	37.69B	37.83B	34.06B
Cash, Cash Equivalents and Short-Term Investments	2.10B	12.95B	896.74M	880.33M	3.06B	1.99B
Total Debt	2.59B	3.42B	4.03B	4.13B	448.10M	389.58M
Total Liabilities	30.67B	32.13B	31.47B	30.99B	31.41B	27.93B
Stockholders Equity	7.66B	7.44B	7.08B	6.70B	6.43B	6.13B
Cash Flow
Free Cash Flow	260.50M	451.55M	612.20M	464.11M	675.71M	560.18M
Operating Cash Flow	265.33M	472.69M	646.36M	506.53M	694.73M	582.32M
Investing Cash Flow	1.38B	1.98B	1.09B	-1.96B	-2.72B	-1.27B
Financing Cash Flow	-2.09B	-940.22M	-1.71B	-666.75M	3.23B	1.46B

Prosperity Bancshares Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 71.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 71.38 is above the 20-day moving average (MA) of 69.54, above the 50-day MA of 66.53, and above the 200-day MA of 67.36, indicating a bullish trend. The MACD of 1.61 indicates Negative momentum. The RSI at 65.80 is Neutral, neither overbought nor oversold. The STOCH value of 50.38 is Neutral, 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
PB	79 Outperform	$6.83B	12.85	7.09%	3.25%	0.55%	19.13%
HOMB	77 Outperform	$5.64B	12.50	11.20%	2.79%	1.43%	19.58%
SNV	74 Outperform	$7.32B	9.84	14.32%	2.99%	8.90%	142.83%
BOKF	73 Outperform	$7.54B	14.20	9.13%	1.96%	-2.81%	14.96%
CADE	72 Outperform	$7.95B	15.70	9.10%	2.53%	14.58%	-19.97%
OZK	70 Outperform	$5.48B	7.80	12.35%	3.60%	2.79%	2.11%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Prosperity Bancshares Corporate Events

Prosperity Bancshares Announces Merger with Southwest Bancshares

On October 1, 2025, Prosperity Bancshares announced a definitive merger agreement with Southwest Bancshares, Inc., a Texas bank holding company. Under the agreement, Southwest will merge into Prosperity, with its stock converted into Prosperity shares or cash. The merger, expected to close in the first quarter of 2026, aims to expand Prosperity’s footprint in Central Texas, particularly in the San Antonio metro area, and enhance its market presence with additional branches and an experienced lending team.