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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on SLM

SLM Corporation faced negative drivers over the recent 3 months. The company's Q3 2025 earnings missed estimates, with a quarterly earnings of $0.63 per share, versus the Zacks Consensus Estimate of $0.84 per share. Higher expenses weighed on the company's profit. However, a strategic partnership with KKR, a leading global investment firm, was announced, which is expected to boost capital efficiency. Additionally, a significant acquisition of SLM Corp shares by Glenn Greenberg was made.

1.c. Company Highlights

2. Sallie Mae's Q3 2025 Earnings: A Closer Look

Sallie Mae reported a GAAP diluted EPS of $0.63 per share in the third quarter, falling short of estimates at $0.84. Despite this, the company delivered a successful quarter and peak season, with loan originations reaching $2.9 billion, representing 6.4% growth over the year-ago quarter. Net interest income was $373 million, up $14 million from the prior year quarter, driven by a net interest margin of 5.18%, 18 basis points ahead of the year-ago quarter.

Publication Date: Oct -27

📋 Highlights
  • GAAP Earnings Growth:: Q3 GAAP diluted EPS reached $0.63, with $2.9B loan originations (6.4% YoY growth).<br>
  • Net Charge-Offs Decline:: Private loan net charge-offs at 1.95%, down 13 bps YoY, reflecting disciplined underwriting.<br>
  • Loan Sales Gains:: $1.9B in loans sold generated $136M gains, boosting capital and liquidity.<br>
  • Net Interest Margin Expansion:: NIM rose to 5.18% (18 bps YoY), driven by $373M net interest income.<br>
  • 2025 Earnings Guidance:: Revised to $3.20–$3.30/share, with 6% originations growth and stable net charge-offs.<br>

Asset Quality and Credit Performance

Private education loan net charge-offs in Q3 of '25 were $78 million, representing 1.95% of average private education loans and repayment, down 13 basis points from the year-ago quarter. The company's cosigner rate was 95%, and the average FICO score at approval increased to 756 from 754, reflecting continued discipline in underwriting standards. Jonathan Witter noted that delinquencies are "plus or minus flat within normal operational variability," and the company is confident in its long-term through-the-cycle metrics.

Growth Prospects and Outlook

The company is optimistic about the long-term outlook for private student lending and the growth of Sallie Mae, driven by recent federal reforms and opportunities to better serve students and families. Graduate originations are up 11% year-over-year, and the company is preparing for the repayment wave of graduates. Sallie Mae expects GAAP earnings per common share for 2025 to be between $3.20 and $3.30, reaffirming its 2025 outlook.

Valuation and Dividend Yield

With a P/E Ratio of 9.18 and a P/B Ratio of 2.44, Sallie Mae's valuation appears reasonable. The company's ROE is 26.87%, indicating strong profitability. The Dividend Yield is 1.88%, providing a relatively stable source of return for investors. Analysts estimate next year's revenue growth at 6.0%, which is in line with the company's historical performance.

Strategic Initiatives and Future Plans

The company is exploring new opportunities, including the PLUS program, which could lead to an annual origination change of $4 billion to $5 billion. Sallie Mae is also considering a new third funding leg, which could involve a more stable long-term earnings model with attractive capital characteristics. The company's commitment to buying back stock aggressively to drive shareholder value is also noteworthy.

3. NewsRoom

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Fidelity Stock Selector Mid Cap Fund Q3 2025 Performance Review

Nov -26

Source: seekingalpha.com

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Glenn Greenberg's Strategic Moves: Elevance Health Inc. Takes Center Stage with a 5.43% Portfolio Impact

Nov -14

Source: gurufocus.com

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Salie Mae Enters Multi-Year Private Credit Partnership With KKR

Nov -13

Source: zacks.com

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Glenn Greenberg's Strategic Acquisition of SLM Corp Shares

Nov -13

Source: gurufocus.com

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Sallie Mae to Host Investor Forum on Dec. 8

Nov -12

Source: businesswire.com

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Sallie Mae Launches Private Credit Strategic Partnership with KKR

Nov -12

Source: businesswire.com

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Sallie Mae Awards $500,000 in Scholarships to Help Students Access and Complete College

Nov -06

Source: businesswire.com

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Scholarship Myths May Be Costing Families Free Money for Higher Education

Oct -28

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Private Education Loans

Expected Growth: 4.0%

SLM Corporation's private education loans growth is driven by increasing college enrollment rates, rising tuition fees, and a growing demand for higher education. Additionally, the company's strategic partnerships with schools and lenders, as well as its diversified loan portfolio, contribute to its 4.0% growth rate.

7. Detailed Products

Private Education Loans

SLM Corporation offers private education loans to students and families to help finance their education expenses.

Refinancing Loans

SLM Corporation offers refinancing loans to help borrowers consolidate and refinance their existing student loans into a single loan with a lower interest rate.

Business Loans

SLM Corporation offers business loans to small business owners and entrepreneurs to help them finance their business operations and growth.

Personal Loans

SLM Corporation offers personal loans to individuals to help them cover unexpected expenses, consolidate debt, or finance large purchases.

8. SLM Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for SLM Corporation is medium due to the presence of alternative financial institutions and online lending platforms that offer similar services.

Bargaining Power Of Customers

The bargaining power of customers is low for SLM Corporation as customers have limited negotiating power due to the company's dominant market position.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for SLM Corporation as the company relies on a network of suppliers for its operations, but has some negotiating power due to its scale.

Threat Of New Entrants

The threat of new entrants is high for SLM Corporation due to the relatively low barriers to entry in the financial services industry and the increasing trend of fintech startups.

Intensity Of Rivalry

The intensity of rivalry is high for SLM Corporation due to the presence of established competitors in the market and the need to constantly innovate and differentiate itself to maintain market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.54%
Debt Cost 9.80%
Equity Weight 26.46%
Equity Cost 9.80%
WACC 9.80%
Leverage 277.94%

11. Quality Control: SLM Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Synchrony

A-Score: 6.9/10

Value: 7.9

Growth: 7.8

Quality: 7.6

Yield: 4.0

Momentum: 7.5

Volatility: 6.7

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OneMain Holdings

A-Score: 6.7/10

Value: 5.4

Growth: 5.4

Quality: 5.2

Yield: 10.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

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FirstCash

A-Score: 6.5/10

Value: 4.3

Growth: 7.6

Quality: 8.4

Yield: 2.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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SLM

A-Score: 6.2/10

Value: 7.0

Growth: 5.6

Quality: 6.8

Yield: 4.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Western Union

A-Score: 5.8/10

Value: 7.4

Growth: 3.2

Quality: 6.1

Yield: 10.0

Momentum: 0.5

Volatility: 7.7

1-Year Total Return ->

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Ally Financial

A-Score: 5.7/10

Value: 7.1

Growth: 5.2

Quality: 3.3

Yield: 6.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

30.16$

Current Price

30.16$

Potential

-0.00%

Expected Cash-Flows