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Navient (NAVI)
NASDAQ:NAVI
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Navient
(NASDAQ:NAVI)
Rating:60Neutral
Price Target:
$14.00
▲(3.02% Upside)
Positive Factors
Expense Reduction
With the BPS sale, outsourced servicing, and operational streamlining, NAVI targets $400mm in savings.
Loan Origination
NAVI originated $508mm in private education loans, significantly higher compared to the previous year.
Negative Factors
Earnings
The company's earnings per share were below analyst estimates and consensus, leading to a cut in future earnings guidance.
Financial Performance
Lower net interest income and higher provisions due to a weaker macro outlook and rising non-performing assets negatively impacted the company's performance.
Operating Expenses
Operating expenses were higher than estimated, with expectations of continued growth in certain expense areas.
Navient (NAVI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.36B
Dividend Yield4.71%
Average Volume (3M)950.63K
Price to Earnings (P/E)42.1
Beta (1Y)1.00
Revenue Growth-25.37%
EPS Growth-75.77%
CountryUS
Employees2,100
SectorFinancial
Sector Strength73
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.20
Shares Outstanding99,431,040
10 Day Avg. Volume707,233
30 Day Avg. Volume950,629
Financial Highlights & Ratios
PEG Ratio-0.31
Price to Book (P/B)0.55
Price to Sales (P/S)0.38
P/FCF Ratio3.16
Enterprise Value/Market Cap34.17
Enterprise Value/Revenue13.15
Enterprise Value/Gross Profit28.62
Enterprise Value/Ebitda22.49
Forecast
1Y Price Target
$13.20Price Target Upside-2.87% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering5
Navient Business Overview & Revenue Model
Company DescriptionNavient (NAVI) is a leading provider of education loan management and business processing solutions. The company operates primarily in the education finance sector, focusing on student loans, servicing, and collections. Navient offers a range of services including loan origination, servicing, and asset recovery, catering to borrowers and educational institutions. Additionally, it provides financial literacy resources and manages portfolios of federal and private education loans, contributing to its mission of helping borrowers manage their educational financing needs effectively.
How the Company Makes MoneyNavient generates revenue primarily through the servicing of federal and private student loans. Key revenue streams include loan servicing fees, interest income from its loan portfolio, and collection fees from delinquent accounts. The company earns servicing fees by managing loan accounts for borrowers and educational institutions, ensuring compliance with regulatory requirements. Interest income is derived from the loans it holds on its balance sheet, particularly on private student loans. Additionally, Navient has partnerships with various educational institutions, which may lead to increased loan origination and servicing opportunities. The company's ability to effectively manage loan portfolios and its diversified service offerings position it well for sustained earnings.
Navient Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong loan origination growth and new legislative opportunities, but was tempered by elevated provision expenses and increased delinquency rates due to macroeconomic challenges.Q2-2025 Updates
Positive Updates
Record Loan Origination Growth
Navient originated $443 million in refinance loans this quarter, doubling the volume from the same period last year. Total loan originations for the first half of the year doubled to over $1 billion compared to a year ago.
Legislative Changes Opening New Opportunities
Recent legislation eliminating the Grad PLUS loan program and changes to borrowing limits across federal loan programs are expected to significantly increase demand for Navient's private in-school graduate loans.
Successful ABS Issuance
Navient's inaugural in-school ABS deal was nearly 6x oversubscribed, raising roughly 98% of loan principal. This issuance was driven by the high quality of loans and a substantial proportion of graduate loans.
Operating Expense Reductions
Navient continues to reduce operating expenses, achieving significant milestones in strategic initiatives and nearing the ambitious $400 million expense reduction target set 18 months ago.
Negative Updates
Elevated Provision Expenses
Provision expenses are elevated due to a less benign macroeconomic outlook, increased delinquency rates, and the transition of loans from disaster forbearance to delinquency.
Increased Delinquency Rates
The 90-plus day delinquency rates increased to 10.1% for FFELP loans and 3% for private loans, driven in part by disaster forbearance volumes.
Macroeconomic Uncertainty
Macroeconomic conditions have weakened compared to the first quarter, contributing to increased provision expenses and uncertainty in future outlooks.
Company Guidance
During Navient's second-quarter 2025 earnings call, the company highlighted several key metrics and changes in federal student loan legislation that are expected to impact its operations. Navient reported a strong quarter of loan origination growth, with $443 million in refinance loans, doubling the volume from the same period last year. For the first half of 2025, total loan originations surpassed $1 billion, prompting the company to revise its full-year origination forecast from $1.8 billion to $2.2 billion. The elimination of the federal Grad PLUS loan program, effective June 2026, is anticipated to significantly expand Navient's opportunities in the private in-school graduate market, which currently equals roughly 10% of Grad PLUS originations. During the quarter, Navient achieved an adjusted tangible equity ratio of 9.8% and reported core earnings per share of $0.20, adjusting for regulatory and restructuring expenses, $0.21 on a core basis. The net interest margin for the Federal Education Loan segment increased to 70 basis points, exceeding the guided range. The Consumer Lending segment saw net interest margin of 232 basis points. The company's provisions reflect macroeconomic outlook changes, with total core earnings expenses reduced by $82 million year-over-year, driven by strategic efforts to cut operating costs.Navient Financial Statement Overview
Summary
Navient exhibits operational efficiency with strong gross and EBIT margins. However, revenue growth and net profitability challenges, coupled with high leverage, present financial risks. Despite stable cash flow management, these issues require attention for improved financial health.Income Statement
Navient's TTM revenue declined compared to the previous year, indicating a negative growth trend. The gross and EBIT margins remain strong at 64.1% and 50.8% respectively, suggesting efficient operations. However, the TTM net profit margin is low at 1.0%, reflecting challenges in converting revenue into net income.65
Positive
Balance Sheet
The company has a high debt-to-equity ratio, indicative of significant leverage, posing potential financial risk. The equity ratio is 5.1%, which shows limited capitalization. ROE is low at 1.3%, suggesting inefficiencies in generating returns for shareholders.55
Neutral
Cash Flow
Navient's free cash flow remains stable despite declining revenue, with a consistent operating cash flow to net income ratio indicating healthy cash generation relative to earnings. However, there is no significant growth in free cash flow, which could affect liquidity.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.53B | 3.81B | 4.92B | 3.84B | 3.53B | 3.69B |
| Gross Profit | 1.62B | 3.49B | 1.16B | 1.66B | 2.27B | 2.98B |
| EBITDA | 2.06B | 3.47B | 3.95B | 3.04B | 2.66B | 2.83B |
| Net Income | 34.00M | 131.00M | 228.00M | 645.00M | 717.00M | 412.00M |
Balance Sheet | ||||||
| Total Assets | 50.22B | 51.79B | 61.38B | 70.80B | 80.61B | 87.41B |
| Cash, Cash Equivalents and Short-Term Investments | 2.08B | 722.00M | 839.00M | 1.53B | 905.00M | 1.18B |
| Total Debt | 47.10B | 48.32B | 57.30B | 66.90B | 76.98B | 83.94B |
| Total Liabilities | 47.66B | 49.15B | 58.62B | 67.82B | 78.00B | 84.97B |
| Stockholders Equity | 2.56B | 2.64B | 2.76B | 2.98B | 2.60B | 2.43B |
Cash Flow | ||||||
| Free Cash Flow | 195.00M | 459.00M | 676.00M | 305.00M | 702.00M | 987.00M |
| Operating Cash Flow | 195.00M | 459.00M | 676.00M | 305.00M | 702.00M | 987.00M |
| Investing Cash Flow | 4.27B | 8.47B | 7.36B | 10.59B | 6.67B | 6.45B |
| Financing Cash Flow | -6.40B | -9.62B | -10.05B | -9.66B | -7.33B | -7.68B |
Navient Technical Analysis
Positive
13.59
Price Trends
13.76
Negative
13.17
Positive
13.43
Positive
Market Momentum
-0.04
Negative
55.44
Neutral
83.98
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NAVI, the sentiment is Positive. The current price of 13.59 is above the 20-day moving average (MA) of 12.95, below the 50-day MA of 13.76, and above the 200-day MA of 13.43, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 55.44 is Neutral, neither overbought nor oversold. The STOCH value of 83.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NAVI.
Navient Risk Analysis
Navient disclosed 32 risk factors in its most recent earnings report. Navient reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Navient Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $7.27B | 10.88 | 20.47% | 6.75% | 9.41% | 13.98% | |
69 Neutral | $1.90B | 26.23 | 5.50% | ― | 7.54% | 70.26% | |
68 Neutral | $17.84B | 12.03 | 10.32% | 3.73% | 9.70% | 0.76% | |
63 Neutral | $3.17B | 31.81 | 115.73% | ― | 92.95% | 151.46% | |
62 Neutral | $6.64B | 15.91 | 18.99% | 1.60% | -4.34% | -38.01% | |
60 Neutral | $1.36B | 42.09 | 1.28% | 4.71% | -25.37% | -75.77% | |
44 Neutral | $132.39M | ― | -907.81% | ― | ― | -664.82% |
* Financial Sector Average
Performance Comparison
NAVI
Navient
13.59
-2.09
-13.33%
SLM
SLM
31.31
10.05
47.27%
LC
LendingClub
17.25
5.13
42.33%
OMF
OneMain Holdings
61.36
16.16
35.75%
CURR
Currenc Group
1.73
-8.27
-82.70%
SEZL
Sezzle Inc.
95.81
73.57
330.80%
Navient Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Navient Updates CEO Compensation Package July 2025
Neutral
Jul 11, 2025
Navient Corporation has amended its compensatory arrangements with its CEO and President, David L. Yowan, as of July 7, 2025. The new agreement increases Mr. Yowan’s annual base salary to $1 million and outlines a comprehensive incentive plan including restricted stock units and performance-based stock units. These changes are designed to align Mr. Yowan’s compensation with company performance and shareholder returns, potentially impacting the company’s operational strategies and stakeholder interests.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.