SLM (SLM) AI Stock Analysis

• Market Cap: $6.84B
• Dividend Yield: 1.52%
• Average Volume (3M): 2.15M
• Price to Earnings (P/E): 16.6
• Beta (1Y): 1.05
• Revenue Growth: -4.34%
• EPS Growth: -38.01%
• Country: US
• Employees: 1,710
• Sector: Financial
• Sector Strength: 73
• Industry: Financial - Credit Services
• EPS (TTM): 0.32
• Shares Outstanding: 208,481,380
• 10 Day Avg. Volume: 2,205,297
• 30 Day Avg. Volume: 2,150,545
• PEG Ratio: -0.55
• Price to Book (P/B): 2.89
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -17.37
• Enterprise Value/Market Cap: 0.40
• Enterprise Value/Revenue: 0.78
• Enterprise Value/Gross Profit: 4.47
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $39.13
• Price Target Upside: 19.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 61 Neutral
• Price Target: $34.00 ▲(3.69%Upside)

SLM's overall stock score reflects mixed financial performance with strong profitability but weak cash flow and high leverage. Technical analysis indicates neutral momentum, while valuation remains fair. Positive developments from federal loan reforms and strong Q1 results provide optimism, but risks from increased provisions and loan challenges weigh on the outlook.

Positive Factors

Market Opportunities

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

Earnings Performance

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

Loan Delinquencies

Delinquencies increased for the second consecutive month, reaching the highest level since February.

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 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: Neutral
• Last Price: 32.79
• 50DMA: Negative
• 100DMA: Positive
• 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 Neutral. The current price of 32.79 is below the 20-day moving average (MA) of 33.13, above the 50-day MA of 32.71, and above the 200-day MA of 28.64, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 45.16 is Neutral, neither overbought nor oversold. The STOCH value of 69.37 is Neutral, 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
NNI	73 Outperform	$4.55B	24.08	5.64%	0.90%	-2.56%	43.22%
OMF	71 Outperform	$7.04B	10.70	20.47%	7.14%	9.41%	13.98%
CACC	68 Neutral	$5.98B	21.99	17.24%	―	13.77%	20.95%
ALLY	68 Neutral	$11.92B	28.53	3.84%	3.12%	-2.99%	-43.64%
Sector *	67 Neutral	$17.09B	11.28	9.28%	3.81%	11.08%	-4.02%
LC	62 Neutral	$1.48B	29.49	3.86%	―	5.72%	31.82%
SLM	61 Neutral	$6.84B	16.56	18.99%	1.52%	-4.34%	-38.01%

SLM Corporate Events

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.

The most recent analyst rating on (SLM) stock is a Hold with a $25.00 price target. To see the full list of analyst forecasts on SLM stock, see the SLM Stock Forecast page.

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.