Prosperity Bancshares, Inc.
Prosperity Bancshares, Inc. Fundamental Analysis
Prosperity Bancshares, Inc. (PB) shows moderate financial fundamentals with a PE ratio of 12.55, profit margin of 31.20%, and ROE of 6.80%. The company generates $1.7B in annual revenue with weak year-over-year growth of -0.23%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 49.9/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze PB's fundamental strength across five key dimensions:
Efficiency Score
WeakPB struggles to generate sufficient returns from assets.
Valuation Score
ModeratePB shows balanced valuation metrics.
Growth Score
ModeratePB shows steady but slowing expansion.
Financial Health Score
ModeratePB shows balanced financial health with some risks.
Profitability Score
ModeratePB maintains healthy but balanced margins.
Key Financial Metrics
Is PB Expensive or Cheap?
P/E Ratio
PB trades at 12.55 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, PB's PEG of 2.44 indicates potential overvaluation.
Price to Book
The market values Prosperity Bancshares, Inc. at 0.81 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.03 times EBITDA. This is generally considered low.
How Well Does PB Make Money?
Net Profit Margin
For every $100 in sales, Prosperity Bancshares, Inc. keeps $31.20 as profit after all expenses.
Operating Margin
Core operations generate 39.97 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.80 in profit for every $100 of shareholder equity.
ROA
Prosperity Bancshares, Inc. generates $1.21 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Prosperity Bancshares, Inc. generates strong operating cash flow of $562.19M, reflecting robust business health.
Free Cash Flow
Prosperity Bancshares, Inc. generates strong free cash flow of $541.48M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.37 in free cash annually.
FCF Yield
PB converts 7.98% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.55
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.44
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.81
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.95
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.30
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.65
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.07
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How PB Stacks Against Its Sector Peers
| Metric | PB Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.55 | 18.83 | Better (Cheaper) |
| ROE | 6.80% | 822.00% | Weak |
| Net Margin | 31.20% | 2005.00% | Weak |
| Debt/Equity | 0.30 | 1.01 | Strong (Low Leverage) |
| Current Ratio | 0.65 | 673.11 | Weak Liquidity |
| ROA | 1.21% | -23560.00% (disorted) | Weak |
PB outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Prosperity Bancshares, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
38.54%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
1.04%
Industry Style: Value, Dividend, Cyclical
GrowingFCF CAGR
-7.11%
Industry Style: Value, Dividend, Cyclical
Declining