Prosperity Bancshares (PB) AI Stock Analysis

• Market Cap: $6.27B
• Dividend Yield: 3.5%
• Average Volume (3M): 1.03M
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.69
• Revenue Growth: 3.65%
• EPS Growth: 20.33%
• Country: US
• Employees: 3,898
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.42
• Shares Outstanding: 95,000,435
• 10 Day Avg. Volume: 1,100,243
• 30 Day Avg. Volume: 1,034,595
• 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: 1.36
• Enterprise Value/Revenue: 4.87
• Enterprise Value/Gross Profit: 7.13
• Enterprise Value/Ebitda: 10.28
• 1Y Price Target: $80.42
• Price Target Upside: 21.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 72 Outperform
• Price Target: $75.00 ▲(13.04% Upside)

Prosperity Bancshares' strong earnings call performance and reasonable valuation are the most significant factors driving the score. Financial performance is solid but challenged by declining revenue and cash flow trends. Technical analysis suggests limited momentum, which slightly offsets the positive outlook.

Positive Factors

Strategic Merger

The merger with American Bank Holding Company enhances market presence in Texas, potentially increasing customer base and revenue streams.

Net Interest Margin Growth

Improved net interest margin indicates better profitability from core banking operations, supporting long-term financial health.

Efficiency Ratio Improvement

A lower efficiency ratio reflects improved operational efficiency, enhancing profitability and competitive positioning.

Negative Factors

Decrease in Deposits

Declining deposits can limit the bank's ability to fund new loans and investments, potentially impacting growth and liquidity.

Increase in Nonperforming Assets

Rising nonperforming assets indicate potential credit quality issues, which could lead to higher loan loss provisions and impact profitability.

Loan Portfolio Decline

A decline in the loan portfolio suggests challenges in loan origination, which may hinder revenue growth from interest income.

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 net interest income, which is earned from the difference between the interest income generated by loans and the interest paid on deposits. Key revenue streams include commercial and residential loans, consumer loans, and the bank’s investment portfolio. Additionally, the company earns non-interest income through various fees associated with services such as account maintenance, transaction processing, and wealth management. Significant partnerships with local businesses and community organizations help drive customer acquisition and retention, further contributing to the bank's overall earnings.

Prosperity Bancshares Financial Statement Overview

Summary

Prosperity Bancshares demonstrates solid financial health with strong profitability and efficient balance sheet management. Despite some challenges in revenue growth and free cash flow generation, the company's core operations remain robust, supported by a low leverage and 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.74B	1.74B	1.56B	1.20B	1.15B	1.24B
Gross Profit	1.19B	1.14B	1.05B	1.11B	1.10B	1.10B
EBITDA	826.69M	647.39M	565.42M	694.47M	689.30M	676.43M
Net Income	522.74M	479.39M	419.32M	524.52M	519.30M	528.90M
Balance Sheet
Total Assets	38.42B	39.57B	38.55B	37.69B	37.83B	34.06B
Cash, Cash Equivalents and Short-Term Investments	1.31B	12.95B	896.74M	880.33M	3.06B	1.99B
Total Debt	3.08B	3.42B	4.03B	4.13B	448.10M	389.58M
Total Liabilities	30.82B	32.13B	31.47B	30.99B	31.41B	27.93B
Stockholders Equity	7.60B	7.44B	7.08B	6.70B	6.43B	6.13B
Cash Flow
Free Cash Flow	322.41M	451.55M	612.20M	464.11M	675.71M	560.18M
Operating Cash Flow	345.15M	472.69M	646.36M	506.53M	694.73M	582.32M
Investing Cash Flow	1.18B	1.98B	1.09B	-1.96B	-2.72B	-1.27B
Financing Cash Flow	-1.73B	-940.22M	-1.71B	-666.75M	3.23B	1.46B

Prosperity Bancshares Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 66.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 66.35 is below the 20-day moving average (MA) of 66.48, below the 50-day MA of 66.92, and below the 200-day MA of 70.29, indicating a bearish trend. The MACD of -0.44 indicates Negative momentum. The RSI at 47.94 is Neutral, neither overbought nor oversold. The STOCH value of 57.68 is Neutral, 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
OZK	80 Outperform	$5.81B	8.31	12.12%	3.33%	7.12%	2.47%
HOMB	77 Outperform	$5.60B	12.99	10.63%	2.79%	4.40%	14.01%
CADE	75 Outperform	$6.91B	13.42	9.08%	2.86%	18.01%	-12.51%
BOKF	75 Outperform	$7.09B	13.33	9.10%	2.05%	-0.54%	16.85%
PB	72 Outperform	$6.27B	12.02	7.02%	3.50%	3.65%	20.33%
SNV	69 Neutral	$6.84B	9.46	13.97%	3.16%	11.52%	220.78%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

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.