Provident Financial Services, Inc. (PFS) Fundamental Analysis: Bull vs. Bear Case

PFS

Provident Financial Services, Inc.

Fundamental data last updated:October 6, 2026

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company profile

SECTOR

Financial Services

industry

Banks - Regional

Exchange

NYSE

County of HQ

US

Next Earnings Date

Pending Announcement

Business Summary

Provident Financial Services, Inc. operates as the bank holding company for Provident Bank that provides various banking products and services to individuals, families, and businesses in the United States. The company's deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA products. Its loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, and retail and industrial properties; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, marine loans, personal loans and unsecured lines of credit, and auto and recreational vehicle loans. The company also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, it provides wealth management services comprising investment management, trust and estate administration, financial planning, tax compliance and planning, and private banking. Further, the company sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. As of December 31, 2021, it operated 96 full-service branch offices in northern and central New Jersey, as well as in Pennsylvania and New York counties. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.

VALUATION

P/E

9.43 Market Cap ($M USD)

$2.89B

Forward P/E

8.81 PEG

1.23 PRICE TO SALES

2.07 PRICE TO BOOK

1.01 EV / EBITDA

12.09 5-Year Average P/E

Free Cash Flow Yield

14.64%

DCF Value

$65.21

Graham Number

$34.05

Price to FCF

6.83 EV to FCF

13.15 Earnings Yield

10.60%

FCF Yield

14.64%

DIVIDEND

Yield

4.33%

Annual Payout

$0.96

Payout Ratio

40.91%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$2.35

Next Year EPS Growth Estimate

$2.52

Next Year Revenue Growth Estimate

$982.84M

Return on Equity (ROE)

10.98%

FREE CASH FLOW

Operating Margin

30.53%

Debt-to-Equity

0.89 Piotroski F-Score

6 Altman Z-Score

0.43 Return on Invested Capital (ROIC)

1.69%

Current Ratio

0.00 Quick Ratio

0.00 Net Debt to EBITDA

5.81 Interest Coverage

0.84 Gross Profit margin

63.43%

FCF PER SHARE

$3.24

REVENUE PER SHARE

$10.70

Gainseekers Quantitative Analysis

Summary

PFS Provident Financial Services, Inc. appears to be a compelling deep value play. Based on the data at the time of this analysis, the stock traded significantly below its DCF Value and Graham Number, suggesting a market mispricing. The Forward P/E of 8.90 and an Earnings Yield of 10.49% indicate a potentially undervalued opportunity, while the Altman Z-score of 0.43 raises red flags about financial distress. Despite these concerns, the valuation metrics suggest a stock that could be attractive for those seeking value amidst uncertainty. However, caution is warranted given the mixed signals.

AI Exposure / Tech Reliance

In the regional banking sector, PFS is positioned to leverage AI and tech advancements to streamline operations and enhance customer service. While not a tech giant, its industry is ripe for digital transformation, which could improve efficiency and reduce costs. The challenge will be integrating these technologies effectively to maintain a competitive edge.

The Bull Case

For the value or GARP investor, PFS offers a tantalizing proposition. With a Return on Equity of 10.98% and a Free Cash Flow Yield of 14.61%, the company demonstrates solid capital efficiency. The Piotroski F-Score of 6 indicates decent financial health, while an Operating Margin of 30.53% showcases robust pricing power. These metrics suggest a company capable of generating consistent cash flow, making it an attractive buy for those seeking undervalued gems with strong fundamentals.

The Bear Case

Despite its attractive valuation, PFS faces significant structural risks. The Altman Z-score signals potential financial distress, and the Interest Coverage ratio of 0.84 suggests vulnerability in meeting debt obligations. Additionally, the stock's proximity to its 52-week high raises concerns about technical overextension. Investors should be wary of these red flags, which could overshadow its value appeal.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Buy

Average Analyst Price Target

$25.00

Institutional Ownership %

1-Year Beta

0.80 Insider Buying % (6 Mo)

Distance to 52-Week High

8.21%

Distance to 52-Week Low

28.16%

EARNINGS SURPRISE %

10.91%

50-DAY SMA

$21.90

200-DAY SMA

$20.57

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.