SLM (SLM) AI Stock Analysis

• Market Cap: $5.55B
• Dividend Yield: 1.9%
• Average Volume (3M): 3.36M
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.96
• Revenue Growth: 0.59%
• EPS Growth: -1.11%
• Country: US
• Employees: 1,710
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 0.63
• Shares Outstanding: 203,038,650
• 10 Day Avg. Volume: 5,796,430
• 30 Day Avg. Volume: 3,359,851
• PEG Ratio: 0.82
• Price to Book (P/B): 2.76
• Price to Sales (P/S): 2.00
• P/FCF Ratio: -18.10
• Enterprise Value/Market Cap: 1.65
• Enterprise Value/Revenue: 3.00
• Enterprise Value/Gross Profit: 6.29
• Enterprise Value/Ebitda: 11.15
• 1Y Price Target: $31.70
• Price Target Upside: 15.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 3.27
• Revenue Forecast (FY): $1.97B

• Rating: 67 Neutral
• Price Target: $28.00 ▲(2.38% Upside)

SLM's strong earnings call and strategic corporate events are significant positives, indicating growth potential. However, financial performance concerns, particularly high leverage and negative cash flows, weigh on the overall score. The technical analysis suggests a bearish trend, but valuation metrics indicate the stock may be undervalued.

Positive Factors

Strategic Partnerships

The partnership with KKR enhances SLM's loan origination capacity, providing efficient funding and strengthening its market position.

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health.

Loan Origination Growth

Growth in loan originations reflects increasing demand for SLM's services and strengthens its position in the education finance market.

Negative Factors

High Leverage

Significant leverage poses risks in volatile markets, potentially impacting financial stability and limiting strategic flexibility.

Negative Cash Flows

Negative cash flows can strain liquidity and hinder the company's ability to invest in growth opportunities or manage debt effectively.

Increase in Delinquencies

Rising delinquencies indicate potential credit quality issues, which could lead to higher provisions and impact profitability.

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 also offers retail deposit accounts, including certificates of deposit, money market deposit accounts, and high-yield savings accounts; and omnibus accounts, as well as credit card loans. It serves students and families through financial aid, federal loans, and student and family resources. The company was formerly known as New BLC Corporation and changed its name to SLM Corporation in December 2013. SLM Corporation was founded in 1972 and is headquartered in Newark, Delaware.

How the Company Makes Money

SLM generates revenue primarily through the interest income on its private student loans, which is a significant portion of its earnings. The company also earns money from fees associated with loan origination, servicing, and late payments. Additionally, SLM has partnerships with educational institutions and financial organizations that contribute to its revenue by facilitating loan offerings directly to students. The diversification of its services, including financial literacy programs and educational resources, further enhances its revenue streams by building brand loyalty and fostering borrower relationships.

SLM Financial Statement Overview

Summary

SLM demonstrates strong revenue growth and profitability with a solid net profit margin of 21.75%. However, high leverage with a debt-to-equity ratio of 2.92 and negative cash flows present potential risks, indicating a need to address liquidity challenges.

Income Statement

SLM has shown strong revenue growth in the TTM period with a 17.3% increase, indicating a positive trajectory. The gross profit margin is healthy at 69.28%, and the net profit margin is solid at 21.75%. However, the EBIT and EBITDA margins have seen fluctuations, with the TTM EBIT margin at 37.09% and EBITDA margin at 37.61%, reflecting some operational challenges.

Balance Sheet

The company's debt-to-equity ratio is high at 2.92, indicating significant leverage, which could pose risks in volatile markets. Return on equity is strong at 26.87%, showing effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced asset structure.

Cash Flow

SLM's cash flow position is concerning, with negative operating and free cash flows in the TTM period. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is zero, indicating potential liquidity issues. However, the free cash flow to net income ratio remains stable at 1.0.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.07B	2.99B	2.84B	2.37B	2.41B	2.34B
Gross Profit	1.46B	1.44B	1.46B	1.19B	2.06B	1.71B
EBITDA	823.78M	816.29M	796.11M	648.06M	1.56B	1.17B
Net Income	623.22M	608.33M	581.39M	469.01M	1.16B	880.69M
Balance Sheet
Total Assets	29.61B	30.07B	29.17B	28.81B	29.22B	30.77B
Cash, Cash Equivalents and Short-Term Investments	3.54B	4.70B	6.56B	6.96B	6.85B	6.45B
Total Debt	6.84B	6.44B	5.23B	5.24B	5.93B	5.19B
Total Liabilities	27.26B	27.91B	27.29B	27.08B	27.07B	28.21B
Stockholders Equity	2.34B	2.16B	1.88B	1.73B	2.15B	2.56B
Cash Flow
Free Cash Flow	-333.01M	-329.39M	-144.64M	4.99M	-49.52M	2.15B
Operating Cash Flow	-333.01M	-329.39M	-144.64M	4.99M	-49.52M	-182.67M
Investing Cash Flow	479.26M	675.99M	-12.46M	1.08B	2.60B	947.33M
Financing Cash Flow	-1.08B	228.16M	-316.23M	-854.89M	-2.62B	-1.88B

SLM Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 27.35 is below the 20-day moving average (MA) of 28.31, below the 50-day MA of 27.39, and below the 200-day MA of 29.54, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 46.98 is Neutral, neither overbought nor oversold. The STOCH value of 49.16 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	79 Outperform	$8.04B	11.59	21.41%	6.11%	9.51%	29.38%
NNI	78 Outperform	$4.98B	11.86	12.27%	0.86%	9.14%	291.99%
CACC	71 Outperform	$5.10B	12.23	28.14%	―	10.30%	154.64%
LC	70 Outperform	$2.27B	22.11	7.40%	―	9.68%	94.85%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SLM	67 Neutral	$5.55B	9.64	27.85%	1.90%	0.59%	-1.11%
NAVI	55 Neutral	$1.28B	-24.48	-1.95%	4.89%	-25.22%	-174.34%

SLM Corporate Events

SLM Highlights Strategic Shifts Amid Lending Reforms

On December 8, 2025, SLM Corporation released a presentation highlighting significant developments and strategic shifts in response to recent federal student lending reforms. The company anticipates substantial growth in loan originations due to changes in the PLUS program, which will cap certain federal loans and expand others, effective July 1, 2026. These changes present a significant opportunity for Sallie Mae to enhance its market position and shareholder value through strategic partnerships, operational investments, and targeted marketing strategies.

SLM Reports Strong Q3 2025 Financial Performance

In its recent presentation at the 2025 Stephens Annual Investment Conference, SLM Corporation reported a GAAP net income of $132 million for the third quarter of 2025, with a diluted earnings per share of $0.63. The company saw a 6% increase in private education loan originations compared to the previous year, reaching $2.9 billion. Additionally, SLM Corporation highlighted a decrease in provision for credit losses due to a significant release from a loan sale, despite an increase in loan commitments and changes in economic outlook. The company also noted a 24.3% return on common equity and a 12.6% total risk-based capital ratio, indicating strong financial performance and capital management.

SLM Partners with KKR to Boost Loan Originations

On November 12, 2025, Sallie Mae announced a strategic partnership with KKR, a global investment firm, to expand its private education loan originations. This multi-year partnership will see KKR purchasing an initial seed portfolio of private education loans and a minimum of $2 billion in newly originated loans annually for three years. Sallie Mae will retain customer relationships and servicing responsibilities, earning fees for its services. This collaboration is expected to enhance Sallie Mae’s loan origination capacity and provide more efficient funding, thereby strengthening its market position and ability to serve students and families.

SLM Reports Strong Q3 2025 Financial Performance

On November 3, 2025, SLM Corporation released two presentations on its website detailing its financial performance for the quarter ended September 30, 2025. The company reported a GAAP net income of $132 million and a net interest margin increase to 5.18%. Private education loan originations reached $2.9 billion, with a 24.3% return on common equity. SLM also repurchased 5.6 million shares under its 2024 program and sold $1.9 billion in private education loans. The company continues to demonstrate consistent profitability and strong risk management, enhancing shareholder value.

SLM Announces Retention Agreement with Donna F. Vieira

On September 29, 2025, SLM Corporation announced a retention agreement with Donna F. Vieira, its Executive Vice President and Chief Commercial Officer. Under this agreement, Vieira will remain in her current role until the hiring of a new Chief Commercial Officer or until December 31, 2025, and as an employee until April 3, 2026. She will receive a $750,000 retention bonus, contingent on her continued performance and assistance in transitioning her duties. The agreement includes a release of claims by Vieira and certain restrictive covenants. If Vieira resigns or is terminated for cause before the separation date, she will forfeit the bonus. Vieira will not receive severance benefits but will be treated as retirement-eligible for compensation and benefits plans.