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what it is
Sallie Mae lends money to students and families when college bills run past savings and federal aid.
how it gets paid
Last year Slm made $2.6B in revenue. Net interest income was the main engine at $1.95B, or 75% of sales.
why it's growing
Revenue grew 0.3% last year. Revenue was $454 million in the quarter, according to the earnings release cited in web coverage.
what just happened
Q4 EPS hit $1.12, beating the $0.90 consensus by 24.44%.
At a glance
B+ balance sheet — decent shape, but not bulletproof
45/100 earnings predictability — expect surprises
8.3x trailing p/e — the market's not buying it — or you found a deal
2.0% dividend yield — cash in your pocket every quarter
7.6% return on capital — nothing to write home about
xvary composite: 49/100 — below average
What they do
Sallie Mae lends money to students and families when college bills run past savings and federal aid.
College bills do not wait for your budget to heal. Sallie Mae is the largest originator of private student loans in the U.S., and that scale helps it produce a 16% return on equity. When your tuition deadline is close, the known lender usually gets the first call.
How they make money
$2.6B
annual revenue · their business grew +0.3% last year
Net interest income
$1.95B
+0.3%
Loan sales and securitization
$0.31B
n/a
Servicing and fee income
$0.17B
n/a
Deposit and banking fees
$0.11B
n/a
Other non-interest income
$0.06B
n/a
The products that matter
originates private student loans
Private Education Loans
$5.3B originated last year
it's the core business. $5.3B of annual originations is what gives SLM its scale and keeps the loan book growing.
largest private originator
funds and services the portfolio
Sallie Mae Bank
$25B loan portfolio
this is the balance-sheet engine. servicing a $25B portfolio produces interest income, fee income, and the data SLM uses to manage borrower performance.
funding engine
sells loans into abs markets
Loan Sales and ABS Execution
$472M gains on debt repurchases
this is not the whole story, but it matters. balance-sheet moves and loan sales can release provisions and support earnings in a given year.
earnings lever
Key numbers
8.3x
trailing p/e
P/E → price divided by earnings → so what: you are paying $8.30 for each $1 of profit, which is cheap if earnings hold.
$2.80
2026 EPS
$2.80 is 14% below 2025's $3.25, so the market is pricing a slowdown, not a growth sprint.
16%
return on equity
Return on equity → profit from shareholder money → so what: the core lending machine still throws off decent returns.
$35
18-month target
That is about 30% above $26.85, which tells you the upside case exists even after the reset.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 55 / 100
- return on equity 16% — $0.16 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in SLM 3 years ago → it's now worth $16,620.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Q4 EPS hit $1.12, beating the $0.90 consensus by 24.44%.
Revenue was $454 million in the quarter, according to the earnings release cited in web coverage. Full-year EPS reached $3.25 versus $2.68 in 2024, but 2026 is still expected to cool to $2.80.
$454M
revenue
$1.12
eps
24.44%
eps surprise
the number that mattered
The 24.44% EPS beat matters because it shows the quarter was better than feared, even while the full-year 2026 setup still looks weaker.
-
slm corp. likely ended 2025 on a strong note. (fourth-quarter results were due to be released as we went to press.) the student loan originator likely registered a double-digit earnings advance, as the fourth quarter typically sees a seasonal surge in private student loan originations as students fund tuition for the new academic year, thus boosting net interest income.
-
too, the company’s strategic execution of loan sales into the assetbacked securities market, which allow for a release of provisions, thereby enhance earnings.
-
credit performance also likely stabilized, with net change-offs returning to the 2.0%-2.2% range.further, the company’s loan modification and loan loss mitigation programs are expected to help borrowers establish positive payment habits and keep them from defaulting.
-
recent noise and a weaker earnings trajectory have dimmed the outlook for 2026.in mid-january, the portnoy law firm announced plans to sue slm on behalf of investors who bought shares during the period following management’s rosier commentary about student loan borrower performance. investor sentiment has also been weighed down by lingering uncertainty after the 2025 investor day conference. management highlighted the need for accelerated investments in order to better position slm for the anticipated phasing out of federal graduate plus loans in july 2026 under president trump’s big, beautiful bill.
-
slm’s new outlook suggests expenses could rise 16% vs. prior year.slm is working with adtalem in order to create new private financing options for healthcare students.
source: company earnings report, 2026
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What could go wrong
the #1 risk is 2026 expense growth outrunning private loan growth.
high
expense guidance reset
management said 2026 operating expenses could rise 16% from the prior year. that directly leans on the 32% profit margin investors just saw in the latest quarter.
high-impact
med
graduate plus policy whiplash
the possible phase-out of federal Graduate PLUS loans in july 2026 could open up roughly $5B in opportunity for private lenders. it could also bring pricing pressure, policy reversals, or higher acquisition costs.
med-impact
med
credit normalization breaks the cheap multiple story
net charge-offs stabilized at 2.0%–2.2%. if borrower performance worsens from here, provisions and sentiment can turn at the same time. welcome to lender math.
med-impact
med
legal and credibility overhang
the investor lawsuit effort tied to prior borrower-performance commentary keeps management credibility in play. for financial stocks, trust is part of the asset base whether it sits on the balance sheet or not.
med-impact
a 16% cost increase against a hoped-for $5B demand tailwind is the whole setup. if the demand shows up slower than expected, the low multiple stops looking generous.
source: institutional data · regulatory filings · risk analysis
Pay attention to
capital return
$200M accelerated share buyback
announced march 9, 2026. it is part of a $500M authorization targeted for completion by year-end 2026. if the stock stays cheap, buybacks do more work.
earnings calendar
q1 2026 earnings
analysts expect EPS of $0.96 and revenue of $391.7M. you are watching originations, expense discipline, and any change in the credit tone.
policy risk
graduate plus loan decision
july 2026 is the key date in the current policy discussion. this is the potential catalyst behind the private loan growth story, and also the cleanest way for that story to disappoint.
credit trend
net charge-offs at 2.0%–2.2%
that range says borrower performance has stabilized. if it drifts up, the market will care more about loss content than about loan growth.
Analyst rankings
earnings predictability
45 / 100
earnings are harder to model here. in human-speak, analysts think you should expect a few surprises.
source: institutional data
Institutional activity
169 buyers vs. 219 sellers in 3q2025. total institutional holdings: 0.2B shares.
source: institutional data
Price targets
3-5 year target range
$21
$49
$27
current price
$35
target midpoint · +30% from current · 3-5yr high: $45 (+70% · 15% ann'l return)
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