SLM (SLM) AI Stock Analysis

• Market Cap: $6.75B
• Dividend Yield: 1.49%
• Average Volume (3M): 2.00M
• Price to Earnings (P/E): 11.6
• Beta (1Y): 1.04
• Revenue Growth: -0.70%
• EPS Growth: -12.72%
• Country: US
• Employees: 1,710
• Sector: Financial
• Sector Strength: 82
• Industry: Financial - Credit Services
• EPS (TTM): 1.40
• Shares Outstanding: 209,856,500
• 10 Day Avg. Volume: 1,815,500
• 30 Day Avg. Volume: 2,003,225
• PEG Ratio: 2.09
• Price to Book (P/B): 2.82
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -16.87
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 0.96
• Enterprise Value/Gross Profit: 5.18
• Enterprise Value/Ebitda: 2.31
• 1Y Price Target: $34.50
• Price Target Upside: 7.28% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 66 Neutral
• Price Target: ―

SLM's overall score reflects strong profitability and strategic corporate actions, tempered by liquidity concerns and technical caution. The stock is fairly valued, with growth potential supported by recent corporate events and earnings call insights.

Positive Factors

Credit Performance

Delinquency rates eased further, showing good progress as they fell for the third consecutive month.

Financial Performance

SLM achieved a solid execution on a $2 billion loan sale, contributing to a strong financial performance.

Partnerships and Joint Ventures

SLM evaluating alternatives to loan sales, such as partnerships/JVs, something viewed positively with potential for multiple expansion.

Negative Factors

Delinquency Trends

Delinquency rates continue to increase year-over-year, indicating potential future challenges in credit performance.

Loan Modifications

In April, loans in modifications accounted for 12.00% of total loans, up from 11.76% in March.

Net Loss Rates

Net loss rates rose sharply, highlighting volatility in the monthly ABS net loss rates.

SLM Business Overview & Revenue Model

Company Description

SLM Corporation, commonly known as Sallie Mae, is a publicly traded company that primarily operates in the financial services sector. It specializes in providing education loans, focusing on private student loans for undergraduate, graduate, and professional education. Sallie Mae also offers various financial products, including savings accounts, CDs, and credit cards, aiming to support students and their families in financing higher education.

How the Company Makes Money

SLM Corporation makes money primarily through the origination and servicing of private student loans, which are not funded or guaranteed by the federal government. The company earns revenue from the interest on these loans, as well as fees associated with loan origination and servicing. Additionally, Sallie Mae generates income from its consumer banking operations, including interest and fees from deposits, CDs, and credit card products. The company's earnings are influenced by interest rate environments, demand for private student loans, and its ability to manage credit risk effectively.

SLM Financial Statement Overview

Summary

SLM demonstrates strong profitability with solid profit margins and an improved leverage position. However, declining revenue growth and negative cash flow metrics present concerns about sustainability and liquidity.

Income Statement

The company exhibits strong profitability with a solid gross profit margin of 76.1% and a net profit margin of 39.4% in the TTM period. However, the revenue growth rate showed a decline of 40.0% from the previous year, which is concerning. EBIT and EBITDA margins are robust at 27.1% and 20.5%, respectively, indicating efficient operational performance.

Balance Sheet

The balance sheet reflects a strong equity ratio of 8.3%, suggesting a decent level of financial stability. However, the debt-to-equity ratio has improved to 0.0 in the TTM period due to zero debt, indicating reduced financial leverage. Return on equity remains impressive at 25.8%, showcasing effective use of shareholder funds.

Cash Flow

The cash flow analysis indicates challenges with negative free cash flow in the TTM period, suggesting potential liquidity issues. The operating cash flow to net income ratio is negative, highlighting inefficiencies in converting profits to cash. The free cash flow to net income ratio is also negative, reflecting cash management concerns.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.15B	2.62B	1.46B	1.82B	2.03B	1.81B
	Gross Profit
1.78B	2.27B	890.43M	1.29B	1.53B	1.58B
	EBIT
911.73M	1.63B	1.09B	637.55M	1.54B	1.15B
	EBITDA
812.14M	1.63B	1.13B	0.00	762.91M	1.25B
	Net Income Common Stockholders
622.93M	608.33M	581.39M	469.01M	1.16B	880.69M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.35B	4.70B	4.15B	4.67B	6.85B	6.45B
	Total Assets
30.63B	30.07B	29.17B	28.81B	29.22B	30.77B
	Total Debt
4.92B	6.44B	5.23B	5.24B	5.93B	5.19B
	Net Debt
-1.29B	1.74B	1.08B	619.00M	1.60B	733.92M
	Total Liabilities
28.02B	27.91B	27.29B	27.08B	5.93B	5.19B
	Stockholders Equity
2.61B	2.16B	1.88B	1.73B	2.15B	2.56B
Cash Flow		Free Cash Flow
-399.94M	-329.39M	-144.64M	4.99M	-49.52M	2.15B
	Operating Cash Flow
-399.94M	-322.41M	-144.64M	4.99M	-49.52M	-182.67M
	Investing Cash Flow
600.59M	675.99M	-12.46M	1.08B	2.60B	947.33M
	Financing Cash Flow
-65.12M	228.16M	-316.23M	-854.89M	-2.62B	-1.88B

SLM Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 32.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLM, the sentiment is Neutral. The current price of 32.16 is below the 20-day moving average (MA) of 32.96, above the 50-day MA of 29.99, and above the 200-day MA of 26.65, indicating a neutral trend. The MACD of 0.51 indicates Positive momentum. The RSI at 52.16 is Neutral, neither overbought nor oversold. The STOCH value of 12.32 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SLM.

SLM Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CACC	73 Outperform	$5.87B	21.58	17.24%	―	13.77%	20.95%
NNI	68 Neutral	$4.17B	22.06	5.64%	0.98%	-2.56%	43.22%
OMF	68 Neutral	$6.35B	11.29	17.46%	7.80%	9.07%	―
SLM	66 Neutral	$6.75B	11.58	27.60%	1.49%	-0.70%	-12.72%
Sector *	64 Neutral	$12.87B	9.81	7.76%	16985.65%	12.28%	-7.83%
ALLY	63 Neutral	$11.15B	26.68	3.84%	3.31%	-2.99%	-43.64%
LC	60 Neutral	$1.21B	23.84	3.86%	―	5.72%	31.82%

SLM Corporate Events

SLM Corporation Reports Strong Q1 2025 Financial Results

In the first quarter of 2025, SLM Corporation reported a GAAP net income of $301 million and a diluted earnings per share of $1.40. The company experienced a 7.3% growth in private education loan originations compared to the previous year, reaching $2.8 billion. SLM also achieved a 60% return on common equity and paid a common stock dividend of $0.13 per share. Despite a decrease in net interest margin and deposit portfolio balances, the company maintained strong financial metrics, including a 12.9% total risk-based capital ratio. The sale of $2.0 billion in private education loans contributed to a $188 million gain, highlighting the company’s effective capital allocation strategy.

SLM Appoints New Directors to Strengthen Board

On April 23, 2025, SLM Corporation appointed Dr. Daniel Greenstein and Mr. Gary Millerchip as new directors, expanding the Board from twelve to fourteen members. Dr. Greenstein brings extensive experience in higher education strategy and innovation, while Mr. Millerchip offers a strong background in finance and corporate strategy. Their appointments are expected to enhance the Board’s expertise and support the company’s strategic priorities. Additionally, Robert S. Strong announced his retirement from the Board effective June 17, 2025, leading to a subsequent reduction in Board size to thirteen members.

SLM Releases Presentation on Student Loan Portfolio

On April 24, 2025, SLM Corporation released a presentation on its website detailing the historical performance of its Smart Option Student Loan portfolio as of March 31, 2025. The company has been actively involved in securitization and sales of its private education loans, with significant transactions occurring annually from 2020 to 2025. In the first quarter of 2025, Sallie Mae sold approximately $2.0 billion of private education loans to an unaffiliated third party, reflecting its ongoing strategy to manage its loan portfolio and maintain liquidity.