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The promotion of David Bailey to CEO at First Financial Bankshares (FFIN), together with record quarterly net income and firm deposit growth in 2025, has sharpened attention on the bank’s recent performance.
See our latest analysis for First Financial Bankshares.
Despite the leadership change and record results grabbing attention, the share price has been fairly muted. A 7 day share price return of 3.4% contrasts with a 1 year total shareholder return decline of 4.6%, which suggests momentum has been softening rather than building.
If you are weighing up FFIN alongside other potential ideas, it could be a good moment to broaden your search and check out the 20 top founder-led companies
With record quarterly net income, solid deposit growth and the shares trading at a discount to analysts’ price target and intrinsic value estimates, you have to ask: is FFIN undervalued, or is the market already pricing in future growth?
At a last close of $29.98, First Financial Bankshares trades on a P/E of 16.8x, which looks expensive compared with both peers and its own estimated fair level.
The P/E multiple compares the current share price to earnings per share and is a common way to gauge how much investors are paying for each dollar of profit. For a bank like FFIN, it often reflects expectations around earnings growth, balance sheet quality and the stability of those profits.
FFIN is described as trading 33.4% below an internal estimate of fair value based on future cash flows. However, its 16.8x P/E sits above the US Banks industry average of 11.4x and above an estimated fair P/E of 12.8x. That gap suggests the market is willing to pay a premium over what the fair ratio model implies, and it also prices the company richer than the average bank, which is a level the P/E could move closer to if sentiment or expectations shift.
Explore the SWS fair ratio for First Financial Bankshares
Result: Price-to-earnings of 16.8x (OVERVALUED)
However, you still need to weigh softer recent share returns and a richer P/E than many peers, which could limit the potential upside if sentiment cools further.
Find out about the key risks to this First Financial Bankshares narrative.
While the 16.8x P/E suggests FFIN looks expensive relative to peers and its own fair ratio, the SWS DCF model paints a very different picture. On that cash flow view, the shares at $29.98 sit 33.4% below an estimated value of about $45, which frames the same price as potentially cheap instead of rich. That kind of split between earnings multiples and cash flow value can point to a genuine opportunity or a warning sign, so which side do you think has it right?
