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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Prosperity Bancshares, Inc. (XNYS:PB) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PB
Name:
PROSPERITY BANCSHARES, INC. (XNYS:PB)
Sector:
212.39M
Industry:
Banks�Regional
CEO:
Mr. David Zalman
Total Employees:
3,704
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -200.37% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PROSPERITY BANCSHARES, INC.(PB) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BANKS�REGIONAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
69.99
One Month Price Target:
$70.4
Six Month Price Target :
$72.45
Likely Price in One Year's Time:
Ticker:
$74.92
Likely Trading Range Today Under (Normal Volatility)
$69.7
Price Upper limit ($) :
$70.32
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$66.27
This week:
$61.67
This month :
$53.34
Other Primary facts
Market Cap:
6.33B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
91.21M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.67%
-22.14%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$87.27
$79.36
$52.71
$60.62
Medium risk (<10%) entry points
Buy Call
Sell Call
$76.78
Buy Put:
Sell Put:
$75.10
$63.17
$64.88
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PB
Sharpe Ratio:
0.99%
Comparison:
PB, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -19.24% lower than the industry
& is -56.48% lower than the market/S&P 500 average
Average Returns/Yield of
PB
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.69%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is -23.66% below industry average
Classification:
PB, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.59
Statistical test of Returns:
PB has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.61%
Weekly Volatility:
5.83%
Monthly Volatility:
11.66%
Yearly Volatility:
40.38%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.23%
Volatility in last five trading days has been -91.23% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.32%
Weekly VaR:
-11.89%
Monthly VaR:
-23.78%
How Much Can the price of
PB
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-82.39%
This translates to price declining to:
$55.55
This translates to price declining to:
$12.32
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
PB is a 67.87% riskier investment compared to the market/S&P 500 & is 43.81% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -8.76% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PB
Beta in relation to market/S&P 500--1.05
Expected beta in 1 year's time:
1.326
Expected beta in 3 year's time:
1.876
Unlevered (debt free) Beta:
0.216
Beta in relation to Nasdaq (XNAS):
0.709
Beta in relation to all global stocks::
0.908
Beta Comparison & Analysis
Beta of competitors/peers::
1.075
Beta is -2.63% lower than peers
Average Industry Beta:
0.964
Beta is 8.67% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.29%
Sustainable growth rate is -42.02% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.020
Alpha is -271.85% below industry average alpha yield
Alpha is -127% below the market average
Analysis of Cost of Capital of
PB
Equity cost of capital:
0.103
Equity cost of capital is 5.87% above industry mean WACC
Unlevered (without debt) cost of capital:
2.13%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$11.88
Revenue growth rate per share of (3Y):
0.98
Annual revenue growth rate is -53.80% below industry average
EPS:
$5.50
Expected Annual growth rate of EPS (3Y):
7.40%
Expected future EPS growth rate is -38.42% lower than the Banks�Regional industry
Free cash flow (FCF) per share:
$7.08
Balance sheet equity growth per share: 33.40%
Equity growth rate per share is -13.75% lower than the industry
Debt per share
$0.00
EBITDA per share
$7.89
Valuation Analysis Today of
PB
P/E Ratio:
12.75
P/E Ratio of Competitors/Peers:
7.25
P/E ratio is 75.72% higher than main peers & is 2.73% higher than the industry
Stock price/value with industry average P/E ratio: $68.25
PB is 2.55% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $34.66
Present value of the expected future dividends only: $22.90
P/S (Price to Sales ratio):
5.89
Price to sales ratio is 37.70% above the industry mean
P/B (Price to book value ratio):
0.98
Price to free cash flow: 9.89
Price to free cash flow ratio is -56.33% lower than the industry
Net income growth rate (3Y):
21.56%
Net income growth rate is -60.85% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 9.43%
Dividend yeild: 2.93%
Previous Dividend: $0.52
Previous adjusted dividend: $0.52
Previous Dividend: $2.05
Expected next dividend best case: $0.54
Expected next dividend worst case: $0.50
Average dividend payment (long-term): $0.49
Average dividend increase/decrease (growth rate) % per period: 1.26%
Expected next dividend payment date: 29/09/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 07/01/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$0.52
2021-12-14--$0.52
2021-06-14--$0.49
2022-03-14--$0.52
2021-09-14--$0.49
2021-03-12--$0.49
Dividend growth rate is -94.65% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
488.65%
Net debt to equity ratio:
-23.99%
Debt to assets ratio:
83.01%
Net debt to assets ratio:
-4.08%
Debt-to-asset ratio is -50.14% below industry average
Ability to repay debt:
Interest coverage ratio:
15.98
Interest coverage ratio is 1828.34% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
-
Analysis of Key Statistics
Correlation of price movement with the market:
0.652
Statistical significance of correlation:
PB has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 30.22% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.501
Correlation of price movement with Nasdaq (^IXIC):
0.022
Covariance of price movement with the market:
0.034
Kurtosis
12.201
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.407
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PB
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
14.90%
Operating profit margin is -58.39% lower than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
21.24%
Effective tax rate is -1.45% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
7.81%
Return on equity (ROE) is -34.49% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.33%
Return on assets (ROA) is -42.37% lower than the industry
Financial Leverage:
5.9x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 2.1 years
Stock based compensation to net income ratio:
0.58%
In-depth Efficiency Analysis
Revenue generated per employee:
292.7K
Each employee generates -23% less revenue than industry average revenue per employee
EBITDA generated per employee:
194.3K
Each employee generates -14% less EBITDA than industry average revenue per employee
Profit generated per employee:
137.2K
Each employee generates -3% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
57.3K
Each employee generates -31% less free cash flow than industry average revenue per employee
Assets/Capital per employee
5.0M
Each employee generates -31% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PB
JANUS HENDERSON GROUP PLC (XNYS:JHG)
OneMain Holdings, Inc. (XNYS:OMF)
Bancolombia SA (XNYS:CIB)
HOULIHAN LOKEY, INC. (XNYS:HLI)
THE WESTERN UNION COMPANY (XNYS:WU)
RENAISSANCERE HOLDINGS LTD. (XNYS:RNR)
SYNOVUS FINANCIAL CORP. (XNYS:SNV)
Cadence Bank (XNYS:CADE)
OLD REPUBLIC INTERNATIONAL CORPORATION (XNYS:ORI)
Current Analyst Ratings
Strong buy�0%
Buy�8%
Hold�50%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.08B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
271.47M
-
340.60M
343.78M
-
-
-
1.02B
45.03M
29.34M
719.73M
-
508.31M
645.36M
137.04M
508.31M
Statement of Cash Flow
Date:
Period:
7.17M
Differed Income Tax :
-
Stock Based Compensation :
2.92M
Change in Working Capital :
92.55M
Accounts Receivables:
24.69M
Other Working Capital:
-
Other Non-Cash Items:
10.72M
Net Cash Provided by Operating Activities:
235.68M
Investments in PP&E:
- 23289.00K
Net Acquisitions:
-
Purchases of Investments:
- 4133274.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.56B
461.39M
2.02B
69.54M
-
-
-
336.08M
3.23B
59.06M
14.80B
-
-
18.42B
56.70B
38.27B
1.09M
-
-
-
-
-
-
-
-
31.77B
31.77B
92.16M
2.81B
1.7M
3.60B
March 31, 2022 at 6:00:00 AM
-
6.50B
38.27B
15.26B
-
- 1560321.0K
2.14B
550.96M
- 1464584.00K
-
-
-
- 47923.00K
289.44M
241.52M
-
- 987385.00K
1.56B
2.55B
235.68M
- 23289.00K
212.39M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
PB
2023
2024
2025
2026
2027
$76.36
$81.74
$87.49
$93.65
$100.24