SLM (NASDAQ:SLM) Releases Quarterly Earnings Results, Misses Estimates By $0.36 EPS

SLM (NASDAQ:SLM) released its quarterly earnings results on Thursday. The credit services provider reported ($0.19) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.17 by ($0.36), FiscalAI reports. SLM had a return on equity of 33.81% and a net margin of 26.09%. The company had revenue of $375.47 million during the quarter, compared to the consensus estimate of $453.34 million. During the same period in the previous year, the company earned $0.63 earnings per share. SLM’s quarterly revenue was down 31.3% on a year-over-year basis.

Here are the key takeaways from SLM’s conference call:

• Record originations and new funding partnership: Third-quarter loan originations rose 15% year over year to a company-record $3.4 billion, while graduate loan originations increased 119%. Sallie Mae also announced a three-year Sixth Street partnership, including at least $1.5 billion of annual private education loan purchases and a $600 million seasoned-loan portfolio.
• Higher credit losses: The company raised its 2026 net charge-off guidance to $400 million-$420 million from $345 million-$385 million, primarily due to continued losses associated with certain third-party debt-resolution practices. Management said affected borrowers may have higher repayment capacity and early recovery results are encouraging, but adoption of its revised approach has been slower than expected.
• EPS guidance reduced: Sallie Mae does not expect to complete its previously planned October whole-loan sale because current market premiums are below its minimum acceptable threshold. Retaining the loans is expected to create greater long-term value, but the decision lowered 2026 EPS guidance to $1.95-$2.05 per share.
• Capital return and funding flexibility remain strong: The company repurchased 18.1 million shares, or 9% of shares outstanding, through the first nine months and expects to use most of its remaining authorization by year-end. Management also highlighted solid liquidity and capital ratios, as well as strategic partnerships that reduce reliance on volatile loan-sale markets.
• Restructuring to moderate expense growth: Sallie Mae implemented a restructuring plan to align resources with its growth priorities and improve efficiency. One-time charges are expected to push 2026 non-interest expenses toward the high end of guidance, although management expects more normalized expense growth in 2027 while continuing to invest in graduate lending.

SLM Stock Down 9.5%

NASDAQ SLM traded down $2.08 during trading hours on Friday, reaching $19.68. 2,982,463 shares of the company’s stock traded hands, compared to its average volume of 3,041,753. SLM has a 52-week low of $17.77 and a 52-week high of $31.06. The company has a debt-to-equity ratio of 2.63, a current ratio of 1.33 and a quick ratio of 1.32. The firm has a 50-day simple moving average of $24.63 and a 200 day simple moving average of $24.03. The firm has a market cap of $3.70 billion, a PE ratio of 5.50, a PEG ratio of 1.56 and a beta of 0.96.

SLM Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Friday, December 4th will be given a dividend of $0.13 per share. This represents a $0.52 dividend on an annualized basis and a yield of 2.6%. The ex-dividend date of this dividend is Friday, December 4th. SLM’s dividend payout ratio (DPR) is 14.53%.

More SLM News

Here are the key news stories impacting SLM this week:

• Positive Sentiment: Private education loan originations increased 15% year over year to $3.4 billion, while graduate-loan originations rose 119%. SLM also repurchased 5.1 million shares for $132.2 million, supporting per-share value over the longer term. Sallie Mae Reports $32.3 Million Third-Quarter Loss as Originations Rise 15%
• Positive Sentiment: Sixth Street committed to purchase $1.5 billion of student loans annually, potentially providing SLM with a recurring source of loan-sale liquidity and balance-sheet flexibility. The company also announced a fourth-quarter dividend payable December 15. SLM: 3 Key Takeaways for Long-Term Investors
• Negative Sentiment: SLM reported a third-quarter net loss of $32.3 million, or $0.19 per share, compared with earnings of $0.63 per share a year earlier. Revenue fell 31.3% year over year to approximately $375.5 million, below the roughly $453.3 million analyst expectation. Sallie Mae Swings To Q3 Loss
• Negative Sentiment: The company cut fiscal 2026 EPS guidance to $1.95-$2.05 from $3.10-$3.20, well below the $3.12 consensus estimate. Third-quarter net charge-offs reached $90 million, provisions for credit losses totaled $213.7 million, and delinquencies were 4.2% of loans in repayment, highlighting worsening credit performance. Sallie Mae Cuts Full-Year View After Logging Higher Charge-Offs

Analyst Upgrades and Downgrades

Several analysts have weighed in on the company. Wall Street Zen cut SLM from a “hold” rating to a “sell” rating in a research report on Saturday, July 25th. Barclays set a $22.00 target price on SLM and gave the stock an “equal weight” rating in a report on Friday. Weiss Ratings reissued a “hold (c+)” rating on shares of SLM in a research report on Monday, September 14th. Royal Bank Of Canada lowered their target price on SLM from $29.00 to $28.00 and set an “outperform” rating for the company in a research note on Friday, October 9th. Finally, Wells Fargo & Company restated an “overweight” rating and set a $24.00 price target (down from $28.00) on shares of SLM in a research report on Friday. Four analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus target price of $26.89.

About SLM

SLM Corp., commonly known as Sallie Mae, is a financial services company focused on helping students and families finance higher education. Its primary business is the origination and servicing of private education loans, which can help cover tuition, fees, books, housing and other eligible education-related expenses not fully covered by federal student aid.

The company offers private student loans for undergraduate and graduate education, as well as loans for career-training programs and other education needs.