SLM (SLM) AI Stock Analysis

• Market Cap: $6.32B
• Dividend Yield: 1.63%
• Average Volume (3M): 2.23M
• Price to Earnings (P/E): 15.3
• Beta (1Y): 1.07
• Revenue Growth: -4.34%
• EPS Growth: -38.01%
• Country: US
• Employees: 1,710
• Sector: Financial
• Sector Strength: 67
• Industry: Financial - Credit Services
• EPS (TTM): 0.32
• Shares Outstanding: 208,481,380
• 10 Day Avg. Volume: 2,007,340
• 30 Day Avg. Volume: 2,226,112
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 3.26
• Enterprise Value/Gross Profit: 6.17
• Enterprise Value/Ebitda: 9.64
• 1Y Price Target: $38.33
• Price Target Upside: 25.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 58 Neutral
• Price Target: $32.00 ▲(4.47% Upside)

SLM's overall score reflects strong profitability and strategic capital returns, but is weighed down by negative revenue growth, cash flow challenges, and bearish technical indicators. The company's ability to capitalize on federal student loan reforms presents a potential upside.

Positive Factors

Capital Management

SLM sold $1.8bn of loans, freeing up nearly $400mm of capital, which is estimated to be used in buybacks, as the company has $302mm authority remaining.

Market Opportunity

The anticipated discontinuation of Grad PLUS loans and caps on Parent PLUS loans is expected to create a $4.5B-$5.0B opportunity for SLM based on its current ~60% market share of private student loans.

Market Position

SLM's strong presence and market position should allow it to capture opportunities from the privatization of the Grad Plus program.

Negative Factors

ABS Data

Monthly ABS data suggests that NCOs will likely increase, which is slightly higher than consensus expectations.

Delinquencies

July delinquencies as a percentage of total loans were 4.38%, up from last month's 3.89% and last year's 3.60%.

Earnings

SLM reported core EPS below both JPMe and Street estimates, driven by higher than estimated provision expense.

SLM Business Overview & Revenue Model

Company Description

SLM Corporation, commonly known as Sallie Mae, is a publicly traded company that provides education finance services to students, families, and educational institutions in the United States. The company primarily operates in the education sector, focusing on student loans, loan servicing, and financial aid resources. SLM offers a range of financial products including private student loans, education savings plans, and college planning services, aiming to support students in achieving their educational goals.

How the Company Makes Money

SLM generates revenue primarily through the interest on private student loans, which are issued to students and parents to cover education-related expenses. The company also earns income from loan servicing fees, where it manages the repayment process for education loans. Additionally, SLM profits from ancillary services such as financial literacy resources and educational planning tools offered to students and families. Significant partnerships with educational institutions and financial organizations enhance SLM's reach in the student loan market, creating opportunities for cross-selling products and services. Overall, the combination of interest income, servicing fees, and strategic partnerships constitutes the key revenue streams for SLM.

SLM Financial Statement Overview

Summary

SLM demonstrates strong profitability with excellent profit margins and a solid return on equity. However, the declining revenue growth and negative cash flow metrics are concerning, posing risks to 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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.99B	1.46B	1.19B	2.41B	1.72B
Gross Profit	1.44B	890.43M	1.50B	2.06B	1.58B
EBITDA	816.29M	796.11M	648.06M	1.56B	1.25B
Net Income	608.33M	581.39M	469.01M	1.16B	880.69M
Balance Sheet
Total Assets	30.07B	29.17B	28.81B	29.22B	30.77B
Cash, Cash Equivalents and Short-Term Investments	4.70B	4.15B	4.67B	6.85B	6.45B
Total Debt	6.44B	5.23B	5.24B	5.93B	5.19B
Total Liabilities	27.91B	27.29B	27.08B	5.93B	5.19B
Stockholders Equity	2.16B	1.88B	1.73B	2.15B	2.56B
Cash Flow
Free Cash Flow	-329.39M	-144.64M	4.99M	-49.52M	2.15B
Operating Cash Flow	-329.39M	-144.64M	4.99M	-49.52M	-182.67M
Investing Cash Flow	675.99M	-12.46M	1.08B	2.60B	947.33M
Financing Cash Flow	228.16M	-316.23M	-854.89M	-2.62B	-1.88B

SLM Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 30.63
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLM, the sentiment is Negative. The current price of 30.63 is below the 20-day moving average (MA) of 32.03, below the 50-day MA of 32.38, and above the 200-day MA of 29.28, indicating a neutral trend. The MACD of -0.29 indicates Positive momentum. The RSI at 38.83 is Neutral, neither overbought nor oversold. The STOCH value of 47.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SLM.

SLM Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OMF	76 Outperform	$6.81B	10.35	20.47%	7.15%	9.41%	13.98%
NNI	74 Outperform	$4.59B	14.31	9.42%	0.88%	6.46%	116.26%
LC	69 Neutral	$1.78B	24.88	5.50%	―	7.54%	70.26%
CACC	67 Neutral	$5.33B	13.74	27.30%	―	12.63%	149.03%
Sector *	58 Neutral	HK$111.86B	6.86	-4.20%	3.95%	9.19%	-46.77%
SLM	58 Neutral	$6.32B	15.31	18.99%	1.63%	-4.34%	-38.01%
ALLY	52 Neutral	$11.96B	25.24	4.18%	3.14%	-5.33%	-32.99%

SLM Corporate Events

SLM Reports Q2 2025 Financial Performance Highlights

On August 11, 2025, SLM Corporation released two presentations on its website detailing its financial performance for the quarter ended June 30, 2025. The company reported a GAAP net income of $67 million and a diluted earnings per share of $0.32 for Q2 2025. Despite a slight decrease in private education loan originations compared to the previous year, SLM maintained a strong return on common equity of 12.6%. The company also highlighted its robust capital allocation strategy, including share repurchases and dividend payments, which are aimed at enhancing shareholder value. Additionally, SLM successfully settled its first student loan ABS transaction of the year, demonstrating strong investor demand despite market volatility.

SLM Stockholders Approve Key Proposals at Annual Meeting

At the 2025 Annual Meeting of Stockholders held on June 17, 2025, SLM Corporation’s stockholders approved several key proposals, including the 2025 Employee Stock Purchase Plan (ESPP). The plan had previously been approved by the Board of Directors, contingent on stockholder approval. Additionally, the stockholders elected 13 directors for a one-year term, approved executive compensation, and ratified the appointment of KPMG LLP as the independent public accounting firm for 2025. These decisions are likely to impact the company’s governance and financial strategies moving forward.