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SLM
(NASDAQ:SLM)
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Rating:68Neutral
Price Target:
$26.00
▲(7.04% Upside)
Action:Downgraded
Date:07/24/26
The score is driven primarily by solid profitability but offset by leverage/cash-flow consistency concerns and near-term revenue pressure. Valuation is a notable positive due to the low P/E and reasonable dividend yield. Technicals and the latest earnings call are mixed, reflecting neutral momentum and a balanced outlook with some credit and efficiency headwinds.
Positive Factors
High profitability & ROE
Sustained net margin (~24%) and strong recent profitability indicate durable earnings power. High ROE and operating margins provide internal funding for growth, cushion against credit cycles, and support buybacks/dividends, strengthening long-term shareholder returns.
Negative Factors
Volatile cash flow history
Recent cash generation improved, but multi-year volatility undermines predictability of internal funding. Inconsistent operating/free cash flow across cycles can constrain capacity for consistent buybacks, reinvestment, and loan growth during stress periods.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability & ROE
Sustained net margin (~24%) and strong recent profitability indicate durable earnings power. High ROE and operating margins provide internal funding for growth, cushion against credit cycles, and support buybacks/dividends, strengthening long-term shareholder returns.
Read all positive factors
SLM (SLM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.86B
Dividend Yield2%
Average Volume (3M)3.10M
Price to Earnings (P/E)7.2
Beta (1Y)0.94
Revenue Growth4.76%
EPS Growth78.90%
CountryUS
Employees1,788
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)3.62
Shares Outstanding187,946,960
10 Day Avg. Volume3,074,518
30 Day Avg. Volume3,096,501
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)2.29
Price to Sales (P/S)1.80
P/FCF Ratio9.74
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$28.00Price Target Upside15.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)3.14
Revenue Forecast (FY)$1.91B
SLM Business Overview & Revenue Model
Company Description
SLM Corporation, through its subsidiaries, originates and services private education loans to students and their families to finance the cost of their education in the United States. It provides retail deposit accounts, including high-yield saving...
How the Company Makes Money
SLM primarily makes money by originating and holding private student loans and earning net interest income—the spread between interest income received from borrowers and the company’s funding costs. Revenue is also generated from fees associated w...
SLM Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call presented a balanced view: several operational and strategic positives — modest origination growth, improving credit metrics, strong loan modification outcomes, growing fee revenue, solid capital and liquidity, active share repurchases and progress on strategic partnerships — tempered by near‑term headwinds including lower net interest income/NIM this quarter, higher net charge‑offs concentrated in a small borrower segment, a timing hit (~$25M) from bringing post‑default recoveries in‑house, and elevated one‑time investments that increased the efficiency ratio. Management framed the credit and recovery actions as largely timing‑related and emphasized confidence in the portfolio and a path to margin and efficiency recovery as peak season volumes deploy liquidity and fee streams scale.Positive Updates
GAAP Earnings per Share
GAAP diluted EPS of $0.29 for Q2 2026.
Negative Updates
Net Interest Income Pressure
Net interest income of $333 million, down $44 million year‑over‑year; net interest margin at 4.75% for the quarter (management expects this quarter to be the low point, with normalization toward ~5% as liquidity is deployed).
Read all updates
Q2-2026 Updates
Positive
Negative
GAAP Earnings per Share
GAAP diluted EPS of $0.29 for Q2 2026.
Read all positive updates
Company Guidance
Sallie Mae updated and narrowed its net charge-off guidance to $365–$385 million (raising the low by $20 million) while affirming all other guidance, noting an expected ~$25 million in-year recovery timing impact from changed post‑default practices that management expects to largely offset over time; Q2 NIM was 4.75% (management expects Q2 to be the year low with NIM normalizing closer to ~5% as excess liquidity is deployed in peak season), Q2 originations were $716 million and GAAP diluted EPS was $0.29, private loan 30+ day delinquencies were 3.7%, reserve rate 5.89%, provision $126 million, net interest income $333 million and other income $45 million for the quarter, liquidity was 18.6% of total assets, total risk‑based capital 13.1% and CET1 11.8%; the company completed a $200 million ASR (repurchasing 9.3 million shares), has repurchased ~13 million shares YTD (6.5% of 2025 O/S) and has $242 million remaining under its buyback authorization, plans to do roughly $1 billion more in loan sales this year than originally contemplated, and reiterated longer‑term targets including recovering efficiency into the low‑to‑mid‑30s and a longer‑run NIM in the low‑to‑mid‑5% range as fee‑based revenue and partnerships scale.SLM Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
57
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.07B | 3.11B | 2.99B | 2.84B | 2.37B | 2.41B |
| Gross Profit | 1.69B | 1.65B | 1.44B | 1.46B | 1.19B | 2.06B |
| EBITDA | 992.57M | 995.32M | 816.29M | 796.11M | 648.06M | 1.56B |
| Net Income | 735.51M | 744.85M | 608.33M | 581.39M | 469.01M | 1.16B |
Balance Sheet | ||||||
| Total Assets | 28.58B | 29.75B | 30.07B | 29.17B | 28.81B | 29.22B |
| Cash, Cash Equivalents and Short-Term Investments | 4.64B | 4.29B | 6.69B | 6.56B | 6.96B | 6.85B |
| Total Debt | 5.84B | 5.86B | 6.44B | 5.23B | 5.24B | 5.93B |
| Total Liabilities | 26.10B | 27.29B | 27.91B | 27.29B | 27.08B | 27.07B |
| Stockholders Equity | 2.47B | 2.45B | 2.16B | 1.88B | 1.73B | 2.15B |
Cash Flow | ||||||
| Free Cash Flow | 649.50M | 575.52M | -329.39M | -144.64M | 4.99M | -49.52M |
| Operating Cash Flow | 649.50M | 575.52M | -329.39M | -144.64M | 4.99M | -49.52M |
| Investing Cash Flow | 1.67B | 0.00 | 675.99M | -12.46M | 1.08B | 2.60B |
| Financing Cash Flow | -1.25B | -500.21M | 228.16M | -316.23M | -854.89M | -2.62B |
SLM Risk Analysis
SLM disclosed 37 risk factors in its most recent earnings report. SLM 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
SLM Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $4.86B | 7.18 | 30.31% | 2.14% | 4.76% | 78.90% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $5.81B | 13.88 | 29.39% | ― | 4.52% | 72.48% | |
66 Neutral | $7.32B | 9.41 | 23.07% | 7.01% | 6.93% | 19.96% | |
63 Neutral | $4.88B | 11.87 | 11.39% | 0.97% | 8.64% | 117.05% | |
48 Neutral | $794.21M | -13.75 | -2.45% | 7.78% | -20.89% | -217.55% |
* Financial Sector Average
SLM
SLM
26.00
-5.20
-16.66%
CACC
Credit Acceptance
568.91
120.71
26.93%
NNI
Nelnet
135.87
12.28
9.93%
NAVI
Navient
8.39
-3.53
-29.60%
OMF
OneMain Holdings
62.58
9.74
18.42%
SLM Corporate Events
Executive/Board ChangesShareholder Meetings
SLM Shareholders Reinforce Board, Pay, and Auditor Support
Positive
Jun 18, 2026
On June 16, 2026, SLM Corporation shareholders elected 13 directors to one-year terms at the company’s annual meeting, with all nominees receiving strong support, underscoring continuity in board leadership. Investors also approved, on an ad...
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
SLM Highlights Strong Credit Quality and Growing Market Share
Positive
Jun 10, 2026
On June 10, 2026, SLM disclosed an investor presentation for the Morgan Stanley U.S. Financials Conference, highlighting that its private education loan credit quality remains strong, with average approval FICO scores rising and over 90% of loans ...
Business Operations and StrategyPrivate Placements and Financing
SLM Refinances Debt with New Senior Notes Offering
Positive
May 15, 2026
On May 15, 2026, SLM Corporation closed a $500 million offering of 6.495% fixed-to-floating rate senior notes due 2032, issued under its existing indenture structure with Deutsche Bank National Trust Company as trustee. The notes pay a fixed 6.495...
Business Operations and StrategyPrivate Placements and Financing
Sallie Mae Launches Tender Offer to Refinance Notes
Positive
May 6, 2026
On May 6, 2026, Sallie Mae announced a cash tender offer to repurchase any and all of its outstanding 3.125% senior notes due November 2, 2026, with $500 million in principal amount outstanding. The purchase price for notes tendered by the May 12,...
Business Operations and StrategyFinancial Disclosures
SLM Highlights Strong Q1 2026 Earnings and Loan Growth
Positive
May 5, 2026
On or about May 5, 2026, SLM Corporation published its first-quarter 2026 investor presentation, current as of April 23, 2026, outlining continued momentum in its core private education lending operations. For the quarter ended March 31, 2026, the...
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.