* Note: Prices are in Million (M) USD.
Description:
Prosperity Bancshares, Inc., headquartered in Houston, Texas, is a prominent banking holding company that operates through its wholly-owned subsidiary, Prosperity Bank. The company offers a comprehensive range of retail and commercial banking services to a varied clientele, including individuals and businesses, and is recognized for its strong commitment to customer service and community engagement. By emphasizing sustainable growth and strategic positioning within a competitive banking landscape, Prosperity Bancshares not only strengthens its market presence but also fosters economic development across its service areas, thereby enhancing its long-term viability and reputation in the financial sector.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Note: Financial institutions (banks/insurers/brokers/REITs) are evaluated using sector, P/E, growth, ROE and other factors. The 3.5× Net Debt/EBITDA rule is skipped to avoid misleading signals; however, Cash/Debt/EBITDA are still displayed and counted for scoring.
Cash : $1,766 M
Debt : $2,586 M
EBITDA : $840 M
Net Debt (Debt - Cash): $820 M
Since Net Debt is covered by EBITDA within 1 year, 3 points assigned.
This criteria used industry in which company operates:
Sector: Financial services
Industry: Banks - regional - us
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 12.36
Since Forward PE Ratio is less than 15, 5 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Error: Invalid cash flow data provided.Using default values for calculation.
Based on default values, 1 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $1,742 M
Revenue 5 Years Ago (2019-12-31): $934 M
Total Growth over 5 Years: 86.6%
5-Year Revenue CAGR (Historical): 13.3%
Forward 5-Year CAGR (Tapered): 10.6%
Since historical Revenue CAGR is between 10 - 15, 3 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $95 M
Share Count 5 Years Ago (2020-12-31): $93 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $6.20
Trailing 12-Month Earnings Per Share (EPS): $5.67
Average Earnings Per Share (EPS): $5.94
Dividend Per Share (DPS): $2
Payout Ratio: 39%
Dividend Yield: 3.50%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 3, 3 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 7.9%
Since Average ROE is less than 10, 1 point assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $73.37
52-Week Low: $60.54
Threshold Price (15% Above 52-Week Low): $69.62
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $6,272 M
Since Market Cap is less than 10B, 1 point assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 2% exposure of Total Portfolio.
Warren Buffett's Owners' Earnings:
No positive free cash flow found (TTM or annual) to compute Owners' Earnings per share.
Note: Many fast-growing companies reinvest heavily, so Owners' Earnings may appear low.
Consider other factors in your valuation.
Value-Trade has assigned 22 points to above Prosperity Bancshares Inc (PB) stock.
Fair Value PE
15, Industry Based PE
13, Growth Based PE
15, ROE Based PE
7.92, Risk-Free Anchored PE (25% MoS)
18.34. Based on these 5 values, average assigned is
13.85. Value-Trades has assined P/E value
13.85. An average (Current Year EPS + Next Year EPS) earning per share is
$5.936.
Fair value using multiple P/Es (blended): $82.22 (PE 13.85 × EPS $5.94)
So the Final Fair Value is: $82.22
Understanding the Value-Trades P/E Blend (click to expand)
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What goes into the blended P/E?
- 20-Year Avg P/E — Long-run market baseline; conservative anchor.
- Fair Value P/E — Score-based (cash, debt, sector, etc.).
- Industry P/E — Peer group norm.
- Growth-Based P/E — Uses tapered growth rates, floored at 15.
- RCFC-Based P/E — Maps cash conversion efficiency.
- ROE-Based P/E — Higher ROE supports higher multiples.
- Risk-Free Anchored P/E — Macro floor tied to 10y yield w/ MoS.
How it works
- Extreme values are clamped/filtered (IQR method).
- Anchors (20y avg, RCFC/ROE, risk-free) are always kept if valid.
- Final fair value = min(Blended PE × EPS, Avg PE × EPS).
P/E Reference Summary
Using EPS: $5.94
| Source |
P/E Ratio |
Implied Fair Value |
| Value-Trades Assigned | 13.85 | $82.21 |
Financials mode
3.5× Net Debt/EBITDA penalty is disabled; Cash/Debt/EBITDA are shown and counted.
