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

SLM (NASDAQ:SLM) announced its quarterly earnings results on Thursday. The credit services provider reported ($0.19) EPS for the quarter, missing analysts’ consensus estimates of $0.17 by ($0.36), FiscalAI reports. The company had revenue of $375.47 million during the quarter, compared to the consensus estimate of $453.34 million. SLM had a net margin of 20.43% and a return on equity of 25.75%. The business’s revenue was down 31.3% compared to the same quarter last year. During the same period last year, the company earned $0.63 earnings per share.

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 Price Performance

NASDAQ SLM opened at $19.42 on Friday. The company has a debt-to-equity ratio of 2.63, a quick ratio of 1.32 and a current ratio of 1.33. The stock has a market cap of $3.65 billion, a price-to-earnings ratio of 7.04, a PEG ratio of 1.49 and a beta of 0.96. The business has a 50 day simple moving average of $24.46 and a 200 day simple moving average of $23.99. SLM has a 52-week low of $17.77 and a 52-week high of $31.06.

SLM Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Friday, December 4th will be paid a dividend of $0.13 per share. This represents a $0.52 dividend on an annualized basis and a yield of 2.7%. The ex-dividend date of this dividend is Friday, December 4th. SLM’s dividend payout ratio is presently 18.84%.

Key Headlines Impacting SLM

Here are the key news stories impacting SLM this week:

• Positive Sentiment: Private education loan originations rose 15% year over year to a record $3.4 billion, while graduate-loan originations increased 119%. SLM also repurchased 5.1 million shares for $132.2 million, supporting per-share value over the longer term. Sallie Mae Reports Third-Quarter Results
• Positive Sentiment: Sixth Street committed to purchase approximately $1.5 billion of student loans annually, potentially expanding SLM’s funding and loan-origination capacity. SLM: Three Key Takeaways
• Neutral Sentiment: Morgan Stanley, RBC, and TD Cowen lowered their price targets to $26, $26, and $27, respectively, but retained positive ratings ranging from overweight to buy. The revisions indicate reduced near-term expectations while implying substantial potential upside from recent levels.
• Negative Sentiment: SLM reported a $35.9 million net loss attributable to common stock, or $0.19 per share, compared with $0.63 of earnings a year earlier. Revenue fell 31.3% year over year to approximately $375.5 million, below the $453.3 million consensus estimate. SLM Quarterly Earnings Results
• Negative Sentiment: Management cut 2026 diluted EPS guidance to $1.95–$2.05 from $3.10–$3.20 and raised expected full-year net charge-offs to $400–$420 million. Third-quarter charge-offs reached about $90 million, reflecting increased defaults tied partly to third-party debt-resolution practices.
• Negative Sentiment: Credit-loss provisions totaled $213.7 million and non-interest expenses rose to roughly $220.7 million as SLM spent more to capture seasonal loan demand. These higher costs overwhelmed the strong origination growth and are the primary reasons investors have sold the stock. Sallie Mae Cuts Full-Year View

Analyst Upgrades and Downgrades

Several research analysts recently weighed in on SLM shares. Royal Bank Of Canada reduced their price objective on shares of SLM from $28.00 to $26.00 and set an “outperform” rating on the stock in a research note on Friday. TD Cowen lowered their target price on shares of SLM from $32.00 to $27.00 and set a “buy” rating for the company in a research note on Friday. JPMorgan Chase & Co. cut their target price on shares of SLM from $25.00 to $22.00 and set an “underweight” rating on the stock in a report on Monday, October 12th. Weiss Ratings reiterated a “hold (c+)” rating on shares of SLM in a report on Monday, September 14th. Finally, Morgan Stanley reduced their price target on shares of SLM from $30.00 to $26.00 and set an “overweight” rating on the stock in a research report on Friday. Five research analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, SLM has an average rating of “Hold” and a consensus price target of $26.44.

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.