Prosperity Bancshares, Inc.

Financial ServicesBanks - RegionalNYSE

$69.26

Market Cap: $7.03B

Prosperity Bancshares, Inc. (PB) Valuation Summary

Updated May 9, 2026 00:14

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$120.14 – $331.55	$174.97	+152.6%
Growth Exit 10Y	$144.98 – $387.86	$208.62	+201.2%
EBITDA Exit 5Y	$110.50 – $221.17	$161.28	+132.9%
EBITDA Exit 10Y	$136.03 – $272.65	$194.51	+180.8%
▸ Trading Multiples
P/E	$65.89 – $76.19	$72.70	+5.0%
EV/EBITDA	$78.26 – $120.48	$109.39	+58.0%
EV/Revenue	$48.86 – $71.65	$60.55	-12.6%
▸ PEG
PEG Fair Value	$82.83 – $82.83	$82.83	+19.6%
▸ Earnings Power Value
Earnings Power Value	$71.30 – $102.74	$84.31	+21.7%
▸ Dividend Discount
Dividend Discount	$38.81 – $103.69	$58.59	-15.4%

Valuation History

DCF Analysis

Fair Value

$174.97

Market Price

$69.26

Upside / Downside

+152.6%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Prosperity Bancshares, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.0% to 10.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 20, DIO 60). At a 8.7% WACC with mid-year discounting, the terminal value (77% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $174.97 per share, suggesting PB is undervalued by 152.6% at the current price of $69.26.

FCFF Present Value Calculation

WACC

8.71%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	562	659	698	774	857	879
(−) Net Interest	368	432	457	507	562	576
(+) D&A	30	33	33	36	41	42
EBITDA	960	1,124	1,189	1,316	1,461	1,497

(−) Tax	121	142	150	166	184	189
(−) CapEx	36	43	45	50	56	57
(−) ΔWC	82	26	10	20	22	23
Free Cash Flow (FCFF)	720	914	983	1,079	1,198	1,228

Terminal Value						19,771
WACC / Discount Rate	8.7%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	691	806	798	806	823	13,021

Enterprise Value	16,944
Projection Period	3,923	23.2%
Terminal Value	13,021	76.8%

(−) Current Net Debt	404

Equity Value	16,540
(/) Outstanding Shares	95

Fair Price	$174.97

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.7%	$219	$239	$262	$292	$332
7.7%	$182	$195	$210	$228	$251
8.7%	$156	$165	$175	$187	$201
9.7%	$136	$142	$150	$158	$168
10.7%	$120	$125	$130	$137	$144

Current price: $69.26. Green = undervalued, Red = overvalued.

Fair Value

$208.62

Market Price

$69.26

Upside / Downside

+201.2%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Prosperity Bancshares, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 0.0% to 4.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 20, DIO 60). At a 8.7% WACC with mid-year discounting, the terminal value (60% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $208.62 per share, suggesting PB is undervalued by 201.2% at the current price of $69.26.

FCFF Present Value Calculation

WACC

8.71%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	562	659	698	774	857	939	1,016	1,087	1,148	1,197	1,227
(−) Net Interest	368	432	457	507	562	616	666	712	752	785	804
(+) D&A	30	33	33	36	41	46	51	55	61	65	67
EBITDA	960	1,124	1,189	1,316	1,461	1,601	1,733	1,854	1,960	2,047	2,098

(−) Tax	121	142	150	166	184	202	219	234	247	258	264
(−) CapEx	36	43	45	50	56	61	66	70	74	78	79
(−) ΔWC	82	26	10	20	22	22	21	19	16	13	14
Free Cash Flow (FCFF)	720	914	983	1,079	1,198	1,316	1,428	1,531	1,623	1,699	1,741

Terminal Value											28,028
WACC / Discount Rate	8.7%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	691	806	798	806	823	831	830	818	798	768	12,156

Enterprise Value	20,125
Projection Period	7,969	39.6%
Terminal Value	12,156	60.4%

(−) Current Net Debt	404

Equity Value	19,721
(/) Outstanding Shares	95

Fair Price	$208.62

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.7%	$273	$293	$317	$348	$388
7.7%	$225	$237	$252	$270	$292
8.7%	$191	$199	$209	$220	$233
9.7%	$165	$171	$177	$185	$194
10.7%	$145	$149	$154	$159	$165

Current price: $69.26. Green = undervalued, Red = overvalued.

Fair Value

$161.26

Market Price

$69.26

Upside / Downside

+132.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Prosperity Bancshares, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.0% to 10.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 20, DIO 60). At a 8.7% WACC with mid-year discounting, the terminal value (75% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $161.28 per share, suggesting PB is undervalued by 132.9% at the current price of $69.26.

FCFF Present Value Calculation

WACC

8.71%

3% – 20%

EV/EBITDA Exit Multiple

11.89x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	562	659	698	774	857	879
(−) Net Interest	368	432	457	507	562	576
(+) D&A	30	33	33	36	41	42
EBITDA	960	1,124	1,189	1,316	1,461	1,497

(−) Tax	121	142	150	166	184	—
(−) CapEx	36	43	45	50	56	—
(−) ΔWC	82	26	10	20	22	—
Free Cash Flow (FCF)	720	914	983	1,079	1,198	—

Peers' EBITDA Multiple						11.9x
Terminal Value						17,803
WACC / Discount Rate	8.71%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	691	806	798	806	823	11,725

Enterprise Value	15,648
Projection Period	3,923	25.1%
Terminal Value	11,725	74.9%

(−) Current Net Debt	404
Equity Value	15,244
(÷) Outstanding Shares	95M
Fair Price	$161	+132.8%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.9x	9.9x	11.9x	13.9x	15.9x
6.7%	$130	$152	$175	$198	$221
7.7%	$124	$146	$168	$190	$212
8.7%	$120	$140	$161	$182	$203
9.7%	$115	$135	$155	$175	$195
10.7%	$110	$130	$149	$168	$187

Current price: $69.26. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$194.49

Market Price

$69.26

Upside / Downside

+180.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Prosperity Bancshares, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 0.0% to 4.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 20, DIO 60). At a 8.7% WACC with mid-year discounting, the terminal value (58% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.9x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $194.51 per share, suggesting PB is undervalued by 180.8% at the current price of $69.26.

FCFF Present Value Calculation

WACC

8.71%

3% – 20%

EV/EBITDA Exit Multiple

11.89x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	562	659	698	774	857	939	1,016	1,087	1,148	1,197	1,227
(−) Net Interest	368	432	457	507	562	616	666	712	752	785	804
(+) D&A	30	33	33	36	41	46	51	55	61	65	67
EBITDA	960	1,124	1,189	1,316	1,461	1,601	1,733	1,854	1,960	2,047	2,098

(−) Tax	121	142	150	166	184	202	219	234	247	258	—
(−) CapEx	36	43	45	50	56	61	66	70	74	78	—
(−) ΔWC	82	26	10	20	22	22	21	19	16	13	—
Free Cash Flow (FCF)	720	914	983	1,079	1,198	1,316	1,428	1,531	1,623	1,699	—

Peers' EBITDA Multiple											11.9x
Terminal Value											24,948
WACC / Discount Rate	8.71%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	691	806	798	806	823	831	830	818	798	768	10,820

Enterprise Value	18,789
Projection Period	7,969	42.4%
Terminal Value	10,820	57.6%

(−) Current Net Debt	404
Equity Value	18,385
(÷) Outstanding Shares	95M
Fair Price	$194	+180.8%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.9x	9.9x	11.9x	13.9x	15.9x
6.7%	$180	$203	$226	$249	$273
7.7%	$167	$189	$210	$231	$252
8.7%	$156	$175	$195	$214	$233
9.7%	$146	$163	$181	$198	$216
10.7%	$136	$152	$168	$184	$200

Current price: $69.26. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$72.70

Market Price

$69.26

Upside / Downside

+5.0%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Prosperity Bancshares, Inc. (PB) has a fair value of $72.70 based on 7 comparable companies in the Banks - Regional industry.

P/E Valuation — Banks - Regional

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Prosperity Bancshares, Inc.PB	6,547	12.1x	13.8x
BOK Financial CorporationBOKF	8,049	14.4x	16.5x
Commerce Bancshares, Inc.CBSH	7,622	12.7x	14.4x
Pinnacle Financial Partners, Inc.PNFP	7,583	12.2x	14.6x
Valley National BancorpVLY	7,443	13.3x	21.2x
Columbia Banking System, Inc.COLB	7,150	13.1x	11.4x
F.N.B. CorporationFNB	6,367	11.5x	14.4x
Home Bancshares, Inc.HOMB	5,406	11.1x	13.1x
Industry Median		12.7x	14.4x
(*) Profit after tax		543	474
Equity Value		6,904	6,842
(/) Outstanding shares		95	95
Fair Price		$73	$72

Selected Fair Value (avg of trailing + forward)

$72.70

+5.0%

Fair Value

$109.39

Market Price

$69.26

Upside / Downside

+58.0%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Prosperity Bancshares, Inc. (PB) has a fair value of $109.39 based on 7 comparable companies in the Banks - Regional industry.

EV/EBITDA Valuation — Banks - Regional

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Prosperity Bancshares, Inc.PB	6,547	8.2x	12.0x
BOK Financial CorporationBOKF	8,049	13.9x	22.7x
Commerce Bancshares, Inc.CBSH	7,622	12.8x	16.5x
Pinnacle Financial Partners, Inc.PNFP	7,583	7.8x	12.8x
Valley National BancorpVLY	7,443	14.2x	26.8x
Columbia Banking System, Inc.COLB	7,150	11.9x	19.7x
F.N.B. CorporationFNB	6,367	11.6x	21.0x
Home Bancshares, Inc.HOMB	5,406	9.2x	12.4x
Industry Median		11.9x	19.7x
(*) EBITDA		849	577
= Enterprise Value		10,098	11,391
(-) Net Debt		404	404
Equity Value		9,694	10,988
(/) Outstanding shares		95	95
Fair Price		$103	$116

Selected Fair Value (avg of trailing + forward)

$109.39

+58.0%

Fair Value

$60.55

Market Price

$69.26

Upside / Downside

-12.6%

Verdict

Overvalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Prosperity Bancshares, Inc. (PB) has a fair value of $60.55 based on 7 comparable companies in the Banks - Regional industry.

EV/Revenue Valuation — Banks - Regional

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Prosperity Bancshares, Inc.PB	6,547	4.0x	5.9x
BOK Financial CorporationBOKF	8,049	3.3x	5.4x
Commerce Bancshares, Inc.CBSH	7,622	4.6x	5.9x
Pinnacle Financial Partners, Inc.PNFP	7,583	2.2x	3.7x
Valley National BancorpVLY	7,443	3.0x	5.7x
Columbia Banking System, Inc.COLB	7,150	3.3x	5.5x
F.N.B. CorporationFNB	6,367	2.9x	5.2x
Home Bancshares, Inc.HOMB	5,406	4.1x	5.6x
Industry Median		3.3x	5.5x
(*) Revenue		1,738	1,182
= Enterprise Value		5,759	6,496
(-) Net Debt		404	404
Equity Value		5,355	6,092
(/) Outstanding shares		95	95
Fair Price		$57	$64

Selected Fair Value (avg of trailing + forward)

$60.55

-12.6%

PEG Fair Value

Fair Value

$82.83

Market Price

$69.26

Upside / Downside

+19.6%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 15.0% plus 3.2% dividend yield, the company has a fair value of $82.83 based on NTM EPS (FY2026) of $5.51. The current PEG ratio is 0.84.

PEG Ratio

0.84Undervalued

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 12.6 ÷ (11.9% + 3.2%) = 0.84

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: StalwartPEG highly applicable

PEG works well for steady growers with predictable earnings.

Fair Value Calculation

EPS Growth RateForward	11.9%
Dividend Yield	+3.2%
Adjusted Growth (clamped 8–25%)	15.0%
Fair P/E	15.0x
NTM EPS (FY2026)	$5.51
Fair Value	$82.83

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$5.72	—	—
FY2026E	$5.51	-3.7%	8
FY2027E	$7.16	+29.9%	8

2Y Forward EPS CAGR: 11.9%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$519.3M	$5.60	—
FY2022	$524.5M	$5.73	+2.3%
FY2023	$419.3M	$4.51	-21.3%
FY2024	$479.4M	$5.05	+12.0%
FY2025	$542.8M	$5.72	+13.3%

4Y Historical EPS CAGR: 0.5%

Earnings Power Value

Fair Value

$84.31

Market Price

$69.26

Upside / Downside

+21.7%

Verdict

Undervalued

Using the Earnings Power Value framework with a WACC of 8.7% and normalized earnings of $729.6M, the company has a fair value of $84.31 per share. The EPV range is $71.30 – $102.74 based on WACC sensitivity (7.2% – 10.2%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	730	730	730
(/) WACC	10.2%	8.7%	7.2%
Enterprise Value	7,144	8,374	10,115
(-) Net debt	404	404	404
Equity Value	6,740	7,970	9,712
(/) Outstanding shares	95	95	95
Fair Price	$71.30	$84.31	$102.74

Dividend Discount Model

Fair Value

$58.59

Market Price

$69.26

Upside / Downside

-15.4%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 7.8% and projected dividend growth of 8.4%, the fair value is $58.59 per share. The DDM range is $38.81 – $103.69 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$2.34

Dividend Yield

3.15%

Payout Ratio

40.8%

Dividend Coverage

2.45x

FCF Payout Ratio42.8%

DPS CAGR (4Y)4.2%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$2.34	40.8%	+3.8%
2024	$2.26	44.7%	+1.9%
2023	$2.21	49.1%	+5.0%
2022	$2.11	36.8%	+6.0%
2021	$1.99	35.5%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$2.54	8.4%	0.9278	$2.36
2027	$2.75	8.4%	0.8607	$2.37
2028	$2.98	8.4%	0.7986	$2.38
2029	$3.23	8.4%	0.7409	$2.39
2030	$3.50	8.4%	0.6874	$2.41
Terminal Value	$3.59 DPS	2.5%		$46.68

PV of Projected Dividends$11.91

PV of Terminal Value$46.68

Fair Value per Share$58.59

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	6.4%	7.4%	8.4%	9.4%	10.4%
5.8%	$87	$91	$95	$99	$104
6.8%	$67	$69	$73	$76	$79
7.8%	$54	$56	$59	$61	$64
8.8%	$45	$47	$49	$51	$53
9.8%	$39	$40	$42	$44	$46

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.