Prosperity Bancshares (PB) AI Stock Analysis

• Market Cap: $6.36B
• Dividend Yield: 3.67%
• Average Volume (3M): 1.12M
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.69
• 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: 1,338,746
• 30 Day Avg. Volume: 1,118,949
• 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: 1.13
• Enterprise Value/Revenue: 4.16
• Enterprise Value/Gross Profit: 5.95
• Enterprise Value/Ebitda: 8.53
• 1Y Price Target: $78.17
• Price Target Upside: 16.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 5.66
• Revenue Forecast (FY): $1.25B

• Rating: 74 Outperform
• Price Target: $75.00 ▲(11.66% Upside)

Prosperity Bancshares has a solid financial foundation with strong profitability and operational efficiency. The stock is attractively valued with a reasonable P/E ratio and a good dividend yield. Positive momentum indicators suggest a bullish trend, though caution is advised due to potential overbought conditions. The earnings call provided a positive outlook with strategic growth initiatives, despite some challenges in loan growth and asset quality.

Positive Factors

Strategic Expansion

The merger agreements with Southwest Bancshares Inc. and American Bank Holding Corporation will significantly expand operations, enhancing market position in Texas and potentially increasing revenue streams.

Dividend Growth

The consistent increase in dividends reflects strong cash generation and management's commitment to returning value to shareholders, enhancing investor confidence over the long term.

Improved Net Interest Margin

The improvement in net interest margin indicates better profitability from core banking operations, which is crucial for long-term financial health and competitiveness in the banking sector.

Negative Factors

Decrease in Loan Balances

The decline in loan balances could impact interest income, a primary revenue source, and suggests challenges in maintaining loan growth, which is vital for sustaining long-term revenue growth.

Increase in Nonperforming Assets

Rising nonperforming assets indicate deteriorating asset quality, which can lead to higher provisions and impact profitability, posing a risk to financial stability if not managed effectively.

Competitive Lending Environment

The competitive lending environment may pressure margins and limit loan growth opportunities, challenging the bank's ability to expand its loan portfolio and maintain profitability.

Prosperity Bancshares Business Overview & Revenue Model

Company Description

Prosperity Bancshares, Inc. is a Texas-based bank holding company that operates through its subsidiary, Prosperity Bank. The company primarily focuses on providing a range of financial services, including commercial banking, personal banking, and wealth management. With a strong presence in Texas and Oklahoma, Prosperity Bancshares offers a variety of products such as loans, deposits, treasury management services, and investment services, catering to both individual and business clients.

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: 67.17
• 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 Positive. The current price of 67.17 is above the 20-day moving average (MA) of 64.95, above the 50-day MA of 65.59, and below the 200-day MA of 68.73, indicating a neutral trend. The MACD of 0.56 indicates Negative momentum. The RSI at 58.34 is Neutral, neither overbought nor oversold. The STOCH value of 81.92 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
PB	74 Outperform	$6.36B	11.96	7.09%	3.67%	0.55%	19.13%
OZK	73 Outperform	$5.06B	7.20	12.35%	3.87%	2.79%	2.11%
HOMB	72 Outperform	$5.38B	11.84	11.20%	2.94%	1.43%	19.58%
CADE	72 Outperform	$7.10B	14.03	9.10%	3.04%	14.40%	―
BOKF	71 Outperform	$6.88B	12.95	9.13%	2.15%	-2.81%	14.96%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SNV	65 Neutral	$6.44B	8.66	14.32%	3.34%	8.90%	142.83%

Prosperity Bancshares Corporate Events

Prosperity Bancshares Reports Strong Q3 Earnings and Strategic Expansions

Prosperity Bancshares, Inc. is a Houston-based regional financial holding company that provides a range of personal banking services and investments across Texas and Oklahoma, with a focus on community banking and digital solutions. In its third-quarter 2025 earnings report, Prosperity Bancshares announced a net income of $137.6 million, reflecting an 8.1% increase from the same period in 2024. The company also reported a 3.45% increase in its quarterly dividend, marking the 22nd consecutive annual increase. Key financial highlights include a 15.4% increase in net income for the first nine months of 2025 compared to 2024, a net interest margin increase to 3.24%, and a 4.5% annualized increase in deposits. Strategic moves include a merger agreement with Southwest Bancshares, Inc., and a pending acquisition of American Bank Holding Corporation, aimed at expanding its footprint in Texas. Looking ahead, Prosperity Bancshares remains focused on growth through strategic acquisitions and maintaining strong financial performance, as reflected in its consistent dividend growth and expansion plans.

Prosperity Bancshares’ Earnings Call: Growth Amid Challenges

The recent earnings call for Prosperity Bancshares revealed a mixed sentiment, showcasing strong financial performance with notable net income growth and improved net interest margins. The company also highlighted strategic expansions through mergers. However, challenges such as a decrease in loan balances, an increase in nonperforming assets, and a competitive lending environment were also discussed.

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.

The most recent analyst rating on (PB) stock is a Buy with a $79.00 price target. To see the full list of analyst forecasts on Prosperity Bancshares stock, see the PB Stock Forecast page.