SLM (SLM) AI Stock Analysis

• Market Cap: $3.93B
• Dividend Yield: 1.88%
• Average Volume (3M): 3.22M
• Price to Earnings (P/E): 5.7
• Beta (1Y): 0.99
• Revenue Growth: 0.59%
• EPS Growth: -1.11%
• Country: US
• Employees: 1,710
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 1.12
• Shares Outstanding: 198,154,630
• 10 Day Avg. Volume: 3,761,234
• 30 Day Avg. Volume: 3,217,046
• PEG Ratio: 0.26
• Price to Book (P/B): 2.29
• Price to Sales (P/S): 1.80
• P/FCF Ratio: 9.74
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 1.89
• Enterprise Value/Gross Profit: 3.55
• Enterprise Value/Ebitda: 5.82
• 1Y Price Target: $31.60
• Price Target Upside: 59.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 2.74
• Revenue Forecast (FY): $1.85B

• Rating: 63 Neutral
• Price Target: $21.00 ▲(5.85% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is driven primarily by solid earnings power and strong ROE but constrained by leverage and historically volatile cash flows. Technicals are weak (below major moving averages with negative MACD), while valuation is attractive (low P/E with a modest yield). Earnings call takeaways are mixed: strong 2025 results and long-term growth opportunity, but near-term EPS pressure and some credit metric deterioration.

Positive Factors

Profitability and Margins

SLM's sustained high net margins and an expanded EBIT margin in 2025 indicate durable operating leverage in its core private student-lending franchise. Strong margins provide recurring internal capacity to fund investments, reserves, and capital returns, supporting resilience through credit cycles and enabling long-term strategic initiatives.

Structural Origination Opportunity (Plus Reform)

Federal Plus reform represents a structural TAM expansion that could materially increase originations if realized. An incremental $5bn annual run-rate would scale SLM's core lending revenue, enhance loan flow for partnerships, and provide multi-year runway for EPS and franchise growth assuming disciplined credit and execution.

Capital Position & Share Returns

Robust liquidity and capital ratios coupled with active buybacks demonstrate capital flexibility. This financial cushion supports balance-sheet rebalancing, partnership growth, and temporary earnings variability while enabling sustained shareholder returns without materially jeopardizing regulatory capital or near-term funding operations.

Negative Factors

Elevated Leverage

SLM's elevated leverage increases sensitivity to funding-cost swings and credit stress, constraining financial flexibility. Even with reductions since 2024, a D/E in the ~2.4–3.0x range limits runway for aggressive balance-sheet growth or sustained buybacks if credit trends worsen, raising structural funding risk.

Inconsistent Cash Generation

Multi-year volatility in operating cash flow and free cash flow reduces confidence in durable cash conversion. Intermittent negative OCF means capital returns, investment programs, and reserve build could be constrained in adverse cycles, necessitating reliance on external funding or balance-sheet adjustments in stressed environments.

Loan-Sale Strategy & Metric Complexity

Changing to a loan-sale/warehouse model alters held-for-investment vs. held-for-sale mix and affects reported credit and performance ratios. This structural shift complicates trend analysis, may introduce earnings and reserve volatility, and raises execution risk as the firm integrates new capital efficiency models while maintaining credit discipline.

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

Profitability is strong (solid net margins and expanding EBIT margin in 2025) and ROE is high, but the balance sheet carries meaningful leverage (elevated debt-to-equity) and cash generation has been inconsistent with multiple years of negative operating cash flow before improving in 2025.

Income Statement

SLM shows solid profitability with consistently strong net margins (~20%+ from 2022–2025) and improving operating performance, as EBIT margin expanded into the low-30% range in 2025. Revenue has trended upward overall, culminating in a sharp acceleration in 2025 versus modest growth in 2024 and a decline in 2022. The main weakness is volatility versus the unusually high 2020–2021 margin profile, indicating profitability can swing materially across cycles.

Balance Sheet

The balance sheet reflects meaningful leverage, with debt-to-equity generally elevated (roughly ~2.4x–3.0x across 2021–2025), which increases sensitivity to credit conditions and funding costs. A positive offset is strong returns on equity (high-20% to ~30% recently), suggesting effective capital deployment. Debt levels have come down from 2024 to 2025, but leverage remains a key constraint relative to a more conservatively financed profile.

Cash Flow

Cash generation has been inconsistent: operating cash flow was negative in multiple years (2021, 2023, 2024) before rebounding to a healthier positive level in 2025. Free cash flow also swung sharply (including a very large positive in 2020 and negative periods thereafter), and growth has been highly volatile, which reduces confidence in the durability of cash conversion. The 2025 improvement is encouraging, but the multi-year variability is a material risk.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.11B	2.99B	2.84B	2.37B	2.41B
Gross Profit	1.65B	1.44B	1.46B	1.19B	2.06B
EBITDA	995.32M	816.29M	796.11M	648.06M	1.56B
Net Income	744.85M	608.33M	581.39M	469.01M	1.16B
Balance Sheet
Total Assets	29.75B	30.07B	29.17B	28.81B	29.22B
Cash, Cash Equivalents and Short-Term Investments	4.03B	4.70B	6.56B	6.96B	6.85B
Total Debt	5.86B	6.44B	5.23B	5.24B	5.93B
Total Liabilities	27.29B	27.91B	27.29B	27.08B	27.07B
Stockholders Equity	2.45B	2.16B	1.88B	1.73B	2.15B
Cash Flow
Free Cash Flow	575.52M	-329.39M	-144.64M	4.99M	-49.52M
Operating Cash Flow	575.52M	-329.39M	-144.64M	4.99M	-49.52M
Investing Cash Flow	0.00	675.99M	-12.46M	1.08B	2.60B
Financing Cash Flow	-500.21M	228.16M	-316.23M	-854.89M	-2.62B

SLM Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.84
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 19.84 is below the 20-day moving average (MA) of 25.31, below the 50-day MA of 26.44, and below the 200-day MA of 29.17, indicating a bearish trend. The MACD of -1.57 indicates Positive momentum. The RSI at 16.13 is Positive, neither overbought nor oversold. The STOCH value of 2.78 is Positive, 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
NNI	73 Outperform	$4.62B	10.96	12.27%	0.87%	9.14%	291.99%
OMF	68 Neutral	$6.47B	8.25	23.76%	6.07%	9.51%	29.38%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
CACC	64 Neutral	$5.33B	13.58	28.14%	―	10.30%	154.64%
SLM	63 Neutral	$3.93B	5.74	32.31%	1.88%	0.59%	-1.11%
LC	61 Neutral	$1.73B	13.01	9.55%	―	9.68%	94.85%
NAVI	47 Neutral	$850.26M	-10.65	-1.95%	4.95%	-25.22%	-174.34%

SLM Corporate Events

SLM Updates Investor Presentation Highlighting Strong 2025 Results

On or about February 20, 2026, SLM updated its “Investor Presentation as of December 31, 2025,” providing supplemental detail to its January 22, 2026 fourth-quarter and full-year 2025 earnings disclosure. The materials highlight that private education loan originations rose 6% in 2025 to $7.4 billion, with Q4 originations up 4% year on year to $1.0 billion, underscoring continued demand for its core lending products.

The company reported full-year 2025 GAAP net income attributable to common stockholders of $729 million, or $3.46 per diluted share, including Q4 net income of $229 million and a quarterly dividend of $0.13 per share paid in the fourth quarter of 2025. SLM also emphasized capital and funding strength, citing a 12.4% total risk-based capital ratio, lower Q4 cost of funds, a $5.0 billion sale of private education loans in 2025, and active capital returns via a $373 million share repurchase in 2025 plus a newly approved $500 million, 24‑month buyback program.

Credit performance metrics showed modestly higher delinquencies but stable loss levels, with 4.0% of private education loans in repayment delinquent 30+ days at year-end 2025 versus 3.7% a year earlier, while full-year net charge-offs were 2.15% of average loans in repayment, slightly better than 2.19% in 2024. The provision for credit losses swung to a negative $19 million in Q4 2025 from $108 million a year earlier, signaling improved credit expectations and supporting SLM’s profitability and capital flexibility heading into 2026.

The most recent analyst rating on (SLM) stock is a Buy with a $26.00 price target. To see the full list of analyst forecasts on SLM stock, see the SLM Stock Forecast page.

SLM Highlights Strong 2025 Results and New Buyback Plan

On or about February 13, 2026, SLM Corporation published its fourth-quarter and full-year 2025 investor presentation, detailing a 6% rise in full-year private education loan originations to $7.4 billion and a 4% increase in the fourth quarter versus a year earlier. The company underscored robust capital and liquidity, highlighted by a total risk-based capital ratio of 12.4%, CET1 ratio of 11.1%, Q4 net income of $229 million, full-year GAAP diluted EPS of $3.46, and a new 24‑month, $500 million share repurchase program following $373 million of buybacks in 2025.

The most recent analyst rating on (SLM) stock is a Hold with a $29.00 price target. To see the full list of analyst forecasts on SLM stock, see the SLM Stock Forecast page.

SLM Announces Strong 2025 Results and New Buyback Plan

On January 22, 2026, Sallie Mae reported its fourth quarter and full-year 2025 results, highlighting GAAP diluted earnings of $3.46 per share for 2025 and $1.12 per share for the fourth quarter, driven by 6% annual growth in private education loan originations, improved net charge-off performance, and a higher net interest margin, alongside continued cost discipline. The board also approved a new $500 million share repurchase program starting January 22, 2026 and expected to run through February 4, 2028, while the existing 2024 program with an initial $650 million capacity remains in place until February 6, 2026, signaling an ongoing commitment to returning capital to shareholders after repurchasing 12.8 million shares for $373 million in 2025 and leaving $33 million of prior repurchase capacity at year-end 2025.

The most recent analyst rating on (SLM) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on SLM stock, see the SLM Stock Forecast page.

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.

The most recent analyst rating on (SLM) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on SLM stock, see the SLM Stock Forecast page.