Prosperity Bancshares (PB) AI Stock Analysis

• Market Cap: $5.97B
• Dividend Yield: 3.67%
• Average Volume (3M): 1.03M
• Price to Earnings (P/E): 11.5
• Beta (1Y): 0.70
• 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: 94,993,080
• 10 Day Avg. Volume: 917,892
• 30 Day Avg. Volume: 1,028,641
• 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: 1.42
• Enterprise Value/Revenue: 4.87
• Enterprise Value/Gross Profit: 7.13
• Enterprise Value/Ebitda: 10.28
• 1Y Price Target: $76.71
• Price Target Upside: 21.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 70 Outperform
• Price Target: $71.00 ▲(12.90% Upside)

Prosperity Bancshares' overall score is driven by strong financial performance and positive earnings call sentiment, despite technical indicators suggesting a bearish trend. The stock's reasonable valuation and attractive dividend yield also contribute positively. However, challenges in revenue growth, cash flow conversion, and increased nonperforming assets are notable risks.

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. is a bank holding company based in the United States, primarily focused on providing a range of banking and financial services through its subsidiary, Prosperity Bank. The company operates in the banking sector, offering products such as personal and commercial banking services, mortgage loans, treasury management, and wealth management solutions. Prosperity Bancshares serves a diverse customer base, including individuals, small businesses, and corporate clients across its network of branches in Texas and Oklahoma.

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: 62.89
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 62.89 is below the 20-day moving average (MA) of 64.82, below the 50-day MA of 66.20, and below the 200-day MA of 69.43, indicating a bearish trend. The MACD of -0.89 indicates Positive momentum. The RSI at 42.51 is Neutral, neither overbought nor oversold. The STOCH value of 38.23 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
HOMB	77 Outperform	$5.33B	11.77	11.20%	2.92%	1.43%	19.58%
OZK	73 Outperform	$5.16B	7.27	12.35%	3.83%	2.79%	2.11%
CADE	73 Outperform	$6.47B	12.78	9.10%	3.04%	14.40%	―
PB	70 Outperform	$5.97B	11.52	7.02%	3.67%	3.65%	20.33%
SNV	69 Neutral	$6.33B	8.48	14.32%	3.40%	8.95%	142.83%
BOKF	68 Neutral	$6.67B	12.44	9.16%	2.18%	-3.04%	15.29%
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.

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.

Prosperity Bancshares Earnings Call: Growth and Strategic Moves

The recent earnings call for Prosperity Bancshares painted a generally positive picture, highlighting strong net income growth and an improved net interest margin. The company’s strategic move to merge with American Bank is expected to bolster its market presence, although challenges such as a decrease in deposits and an increase in nonperforming assets were also acknowledged.

Prosperity Bancshares Reports Strong Q2 2025 Earnings

Prosperity Bancshares, Inc. is a Houston, Texas-based regional financial holding company providing personal and business banking services across Texas and Oklahoma. The company operates in the financial services sector and offers a wide range of banking products, including digital banking solutions, mortgage services, and wealth management.