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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, primarily due to a securities fraud investigation announced by several law firms, including Glancy Prongay & Murray LLP, Levi & Korsinsky, and The Law Offices of Frank R. Cruz. The investigation alleges possible violations of federal securities laws, specifically regarding SLM's business, operations, and prospects. The class action lawsuit claims that SLM made materially false and/or misleading statements, and failed to disclose material adverse information, including a significant increase in early-stage delinquencies. Additionally, a $5.5 million stake was sold by Helix Partners.

1.c. Company Highlights

2. SLM Corporation's Strong 2025 Results Set Stage for Continued Growth

SLM Corporation reported a robust fourth quarter and full year 2025, with GAAP diluted EPS of $1.12 and $3.46, respectively, beating analyst estimates of $0.95 for the quarter. The company's private education loan originations reached $1.02 billion in the fourth quarter and $7.4 billion for the full year, representing a 6% increase over 2024. Net interest margin remained stable at 5.21% for the quarter and 5.24% for the full year, indicating a strong ability to manage interest rate risk.

Publication Date: Jan -25

📋 Highlights
  • GAAP Diluted EPS Growth: Full-year 2025 GAAP diluted EPS rose to $3.46 (+32.8% YoY) from $2.68 in 2024.
  • Private Education Loan Originations: 2025 full-year originations hit $7.4B (+6% YoY) with $1.02B in Q4.
  • Share Repurchase Activity: 2025 repurchased 12.8M shares ($373M) and authorized $500M for new buybacks over two years.
  • Net Charge-Offs: 2025 net charge-offs were $346M (2.15% of average private loans) with Q4 at $98M.
  • 2026 Guidance: Expects 12–14% loan origination growth, $2.7–$2.8 EPS, and $345M–$385M net charge-offs.

Loan Performance and Credit Risk Management

Net charge-offs for the private education loan portfolio were $98 million in the fourth quarter and $346 million for the full year, representing 2.15% of average private education loans in repayment. The company's provision for credit losses was a negative $19 million, driven by the release of reserves tied to the $1 billion seasoned loan portfolio sale. This highlights the company's effective credit risk management and ability to adapt to changing market conditions.

Share Repurchase and Capital Return

The company returned capital to shareholders through share repurchases, buying back 3.8 million shares for $106 million in the fourth quarter and 12.8 million shares for $373 million over the full year. A new two-year $500 million share repurchase authorization has been announced, demonstrating the company's commitment to returning value to shareholders. The plan is to be disciplined and programmatic in share repurchases, similar to previous years.

Outlook and Guidance

For 2026, the company expects private education loan origination growth of 12% to 14%, driven by the PlusReform initiative, which could contribute an estimated $5 billion in annual originations. Non-interest expenses are expected to be between $750 million and $780 million, driven by growth and one-time investments. The company expects net charge-offs to be between $345 million and $385 million and diluted EPS to be between $2.7 and $2.8.

Valuation and Growth Prospects

With a P/E Ratio of 7.51 and a P/B Ratio of 2.85, the company's valuation appears reasonable considering its strong growth prospects. Analysts estimate revenue growth of 10.2% for next year, and the company expects high teens to low 20s EPS growth potential in 2027. The return on equity (ROE) of 32.67% and return on invested capital (ROIC) of 20.34% indicate a strong ability to generate returns for shareholders.

3. NewsRoom

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Sallie Mae® Expands Graduate Loan Options For Medical and Dental Students

Mar -17

Source: businesswire.com

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The Sallie Mae Fund Now Accepting Applications for Bridging the Dream Scholarship for High School Seniors

Mar -16

Source: businesswire.com

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SLM Corporation (SLM) Presents at RBC Capital Markets Global Financial Institutions Conference 2026 Transcript

Mar -11

Source: seekingalpha.com

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Sallie Mae Enters $200M Accelerated Share Buyback Agreement

Mar -10

Source: zacks.com

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Sallie Mae Announces $200 million Accelerated Share Repurchase

Mar -09

Source: businesswire.com

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Sallie Mae CEO to Speak at 2026 RBC Capital Markets Global Financial Institutions Conference

Mar -04

Source: businesswire.com

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Sallie Mae Successfully Prices First Student Loan ABS of the Year

Mar -04

Source: businesswire.com

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Sallie Mae Sets Date for Annual Meeting of Stockholders

Feb -23

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: 6.8/10

Value: 7.8

Growth: 7.8

Quality: 7.6

Yield: 4.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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OneMain Holdings

A-Score: 6.6/10

Value: 5.5

Growth: 5.4

Quality: 5.2

Yield: 10.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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FirstCash

A-Score: 6.3/10

Value: 4.1

Growth: 7.6

Quality: 6.4

Yield: 2.0

Momentum: 9.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
SLM

A-Score: 6.1/10

Value: 7.1

Growth: 5.6

Quality: 6.8

Yield: 4.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Western Union

A-Score: 6.0/10

Value: 7.4

Growth: 3.1

Quality: 6.2

Yield: 10.0

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Ally Financial

A-Score: 5.6/10

Value: 6.6

Growth: 5.1

Quality: 3.1

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

19.73$

Current Price

19.73$

Potential

-0.00%

Expected Cash-Flows