Prosperity Bancshares Earnings Preview

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Investors are on the edge of their seats, hoping that Prosperity Bancshares (NAS: PRSP) will top analyst expectations for the third consecutive quarter. The company will unveil its latest earnings on Friday, Oct. 21. Prosperity Bancshares is a financial holding company for Prosperity Bank, which provides financial products and services to small- and medium-sized businesses and consumers.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Prosperity Bancshares with 14 of 17 analysts rating it hold. Analysts like Prosperity Bancshares better than competitor International overall. Zero out of one analysts rate International a buy compared to three of 17 for Prosperity Bancshares. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $99.4 million in revenue this quarter. That would represent a rise of 5.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.76 per share. Estimates range from $0.73 to $0.79.

What our community says:
Most CAPS All-Stars are skeptical of PRSP prospects, with 56.3% awarding it an "underperform" rating. Like the All-Stars, the community is also not a fan of Prosperity Bancshares, with 55% granting it "underperform" rating. Fools are bearish on Prosperity Bancshares, and the message boards have been quiet lately with only 33 posts in the past 30 days. Prosperity Bancshares' CAPS rating of one out of five stars reflects the Fool community sentiment.

Management:
Prosperity Bancshares' profit has risen year over year by an average of 9.2% over the past five quarters. Revenue has fallen for the past three quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Net Margin

32.1%

31.6%

30.8%

29.3%

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At the time this article was published

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