Value
7.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.4 |
| P/S | 6.1 |
| Fwd P/E | 9.3 |
| PEG | 9.7 |
| Analyst target | 4.0 |
- ▸Forward P/E: 9.6x
- ▸PEG: 0.54
- ▸Attractively valued
PB · Why this verdict
Why Prosperity Bancshares (PB) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.4/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Prosperity Bancshares is in a confirmed breakout with golden cross and MACD bullish, has beaten earnings in 3 of the last 4 quarters, and trades at a PEG of 0.32 — but the stock has already surpassed its analyst target, leaving negative upside of 4.7% and limiting near-term entry appeal.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Prosperity Bancshares generates a 40% net margin, which is best-in-class among regional bank peers, reflecting the efficiency of its Texas-Oklahoma community banking franchise and conservative credit underwriting. Peer-rank breakdown | Net margin stays above 30% for at least 3 of the next 4 quarters, confirming the earnings efficiency advantage over peers. | ↓Deteriorating |
| CounterReal estate loan portfolio concentration at 80% in Texas and Oklahoma creates geographic and credit concentration risk; a regional economic downturn could rapidly compress net interest margins and push up charge-offs. | ||
Prosperity Bancshares has formed a golden cross with the stock above all moving averages, a bullish MACD, and rising on-balance volume — confirming technical breakout conditions that historically precede sustained uptrends in regional banks. V9 | Price holds above the 200-day moving average for at least 6 consecutive months and momentum score remains above 6.0 throughout. | →Stable |
| CounterThe stock is already 4.7% above its analyst consensus target, making the breakout a potential sell-signal rather than a buy signal; technical strength at an overvalued level is a classic distribution setup. | ||
With 3 of 4 recent earnings beats and a forward P/E of 9.9x at a PEG of 0.32, the bank combines growing earnings with an attractive valuation, suggesting the market is underpricing its growth rate. Earnings | The company beats consensus EPS estimates in at least 2 of the next 4 quarters, sustaining the majority-beat pattern. | ↑Improving |
| CounterThe most recent quarter missed by 11.9% on an estimate of $1.32 — a significant shortfall that raises questions about whether the revenue and earnings growth trend is durable in a potentially slowing loan demand environment. | ||
Prosperity Bancshares pays a dividend with 334% earnings coverage, providing a substantial income cushion that supports total return even if price appreciation is limited by the current above-target valuation. Catalyst breakdown | Dividend per share is maintained or increased over the next 4 quarters without a cut. | ↑Improving |
| CounterWith concentration risks flagged as 2 HIGH and 2 MEDIUM in regulatory filings, an economic shock to Texas could impair earnings and test dividend sustainability faster than the coverage ratio suggests. | ||
Prosperity Bancshares generates a 40% net margin, which is best-in-class among regional bank peers, reflecting the efficiency of its Texas-Oklahoma community banking franchise and conservative credit underwriting.
↓DeterioratingPeer-rank breakdown
- Expectation
- Net margin stays above 30% for at least 3 of the next 4 quarters, confirming the earnings efficiency advantage over peers.
CounterReal estate loan portfolio concentration at 80% in Texas and Oklahoma creates geographic and credit concentration risk; a regional economic downturn could rapidly compress net interest margins and push up charge-offs.
Prosperity Bancshares has formed a golden cross with the stock above all moving averages, a bullish MACD, and rising on-balance volume — confirming technical breakout conditions that historically precede sustained uptrends in regional banks.
→StableV9
- Expectation
- Price holds above the 200-day moving average for at least 6 consecutive months and momentum score remains above 6.0 throughout.
CounterThe stock is already 4.7% above its analyst consensus target, making the breakout a potential sell-signal rather than a buy signal; technical strength at an overvalued level is a classic distribution setup.
With 3 of 4 recent earnings beats and a forward P/E of 9.9x at a PEG of 0.32, the bank combines growing earnings with an attractive valuation, suggesting the market is underpricing its growth rate.
↑ImprovingEarnings
- Expectation
- The company beats consensus EPS estimates in at least 2 of the next 4 quarters, sustaining the majority-beat pattern.
CounterThe most recent quarter missed by 11.9% on an estimate of $1.32 — a significant shortfall that raises questions about whether the revenue and earnings growth trend is durable in a potentially slowing loan demand environment.
Prosperity Bancshares pays a dividend with 334% earnings coverage, providing a substantial income cushion that supports total return even if price appreciation is limited by the current above-target valuation.
↑ImprovingCatalyst breakdown
- Expectation
- Dividend per share is maintained or increased over the next 4 quarters without a cut.
CounterWith concentration risks flagged as 2 HIGH and 2 MEDIUM in regulatory filings, an economic shock to Texas could impair earnings and test dividend sustainability faster than the coverage ratio suggests.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.4 |
| ROA | 0.9 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Moat | 5.4 |
| Piotroski F | 8.9 |
- ▸Strong margins: 40%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 9.0 |
| EPS growth | 5.5 |
- ▸Strong growth: 26% YoY
Momentum
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 9.7 |
- ▸Overbought (RSI 78)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 78 (late-cycle distribution risk)
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.2 |
| Analyst rating | 5.0 |
| Price target | 6.7 |
Insider
6.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.5 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $929,521 (0.011% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.9 |
| quality rank | 4.8 |
| growth rank | 8.0 |
- ▸Best-in-class margins
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.1 |
| 52w position | 8.9 |
| gap | 5.0 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 7.0 |
| volatility | 8.2 |
| put call | 4.4 |
| implied vol | 6.0 |
| max pain risk | 5.0 |
| beta | 8.9 |
| news risk | 5.0 |
- ▸Concentration risks: 2 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| surprise avg | 4.0 |
| dividend safety | 8.0 |
| news activity | 7.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 3.7%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:8.3>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.3=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=8.3>=5.0 recovering
Reward-to-Risk
-0.33
Upside
-2.7%
Downside
8.4%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 78
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:8.3>=5.5. Top dim: Momentum at 8.3; weakest: Technical at 3.5. No conviction either direction.
The strongest dimensions are Momentum at 8.3, Value at 7.5, and Growth at 7.2; the weakest are Technical at 3.5, Peer rank at 4.9, and Quality at 5.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.33 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Golden Cross Technical Breakout
Trip ifPrice drops below the 200-day moving average and holds below that level for more than 10 consecutive trading days.
- P240 Pct Net Margin Peer Leader
Trip ifNet margin falls below 25% for 2 consecutive quarters, indicating meaningful margin compression.
- P3Earnings Beat Value Combination
Trip ifEarnings miss consensus by more than 8% in 2 of the next 4 quarters, reversing the beat pattern.
- P4Dividend Coverage Income Support
Trip ifDividend per share decreases by more than 15% in any single quarter.