SLM (NASDAQ:SLM) Posts Quarterly Earnings Results, Misses Expectations By $0.17 EPS

SLM (NASDAQ:SLM) issued its quarterly earnings results on Thursday. The credit services provider reported $0.29 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.46 by ($0.17), FiscalAI reports. The business had revenue of $401.11 million for the quarter, compared to analysts’ expectations of $409.22 million. SLM had a return on equity of 34.80% and a net margin of 26.42%.The firm’s revenue for the quarter was down .7% on a year-over-year basis. During the same quarter last year, the company earned $0.32 earnings per share. SLM updated its FY 2026 guidance to 3.100-3.200 EPS.

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

• Peak-season demand is starting strong, with management saying new products like the parent loan and enhanced graduate offerings are seeing application and volume trends at the high end of expectations or better. The company said this supports confidence in 2026 originations and the larger opportunity from PLUS reform.
• Second-quarter results showed GAAP diluted EPS of $0.29 and loan originations of $716 million, up nearly 4.5% year over year. Average FICO on originations improved modestly and cosigner rates remained strong at 84%.
• Net charge-offs increased to $113 million from $94 million a year ago, driven in part by a small group of borrowers they believe are using third-party debt resolution services. Sallie Mae said it has tightened control over post-default recoveries, which it expects to affect 2026 recoveries by about $25 million.
• Management said credit quality remains broadly stable, with modification programs continuing to perform better than expected. Borrowers in active mods are showing over 80% payment success over six and 12 months, and more than 75% of borrowers exiting mods are still paying after three and six months.
• The company expects net interest margin to rebound in the second half as excess liquidity from the March loan sale is deployed into peak-season originations. Management suggested 2Q was likely the low point for margin this year and reaffirmed its longer-term low-to-mid 5% NIM target.

SLM Stock Performance

Shares of SLM stock traded down $0.27 during midday trading on Friday, hitting $23.91. The company had a trading volume of 1,139,034 shares, compared to its average volume of 3,345,807. The company has a debt-to-equity ratio of 2.59, a current ratio of 1.30 and a quick ratio of 1.29. The company’s 50 day simple moving average is $23.51 and its 200 day simple moving average is $23.32. SLM has a 52-week low of $17.77 and a 52-week high of $33.49. The stock has a market cap of $4.51 billion, a price-to-earnings ratio of 6.59, a PEG ratio of 2.30 and a beta of 0.94.

SLM Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Tuesday, September 15th. Investors of record on Friday, September 4th will be given a $0.13 dividend. This represents a $0.52 annualized dividend and a yield of 2.2%. The ex-dividend date is Friday, September 4th. SLM’s payout ratio is 14.40%.

Analyst Ratings Changes

Several research analysts recently commented on the company. Compass Point raised SLM from a “sell” rating to a “neutral” rating and lowered their target price for the stock from $23.00 to $22.00 in a research note on Monday, March 30th. Wells Fargo & Company set a $28.00 target price on shares of SLM in a research note on Friday. Weiss Ratings upgraded shares of SLM from a “hold (c)” rating to a “hold (c+)” rating in a report on Thursday, June 18th. Barclays restated an “equal weight” rating and issued a $26.00 price objective (down from $30.00) on shares of SLM in a report on Tuesday, July 7th. Finally, JPMorgan Chase & Co. raised their price target on SLM from $24.00 to $25.00 and gave the company an “underweight” rating in a research note on Monday, July 13th. Five investment analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, SLM presently has a consensus rating of “Hold” and a consensus price target of $29.80.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of SLM. NewEdge Advisors LLC boosted its stake in SLM by 6.6% in the 1st quarter. NewEdge Advisors LLC now owns 21,350 shares of the credit services provider’s stock worth $627,000 after buying an additional 1,319 shares during the last quarter. Captrust Financial Advisors boosted its holdings in shares of SLM by 6.1% in the 2nd quarter. Captrust Financial Advisors now owns 36,889 shares of the credit services provider’s stock valued at $1,210,000 after purchasing an additional 2,109 shares during the last quarter. EverSource Wealth Advisors LLC grew its stake in shares of SLM by 118.2% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 3,995 shares of the credit services provider’s stock valued at $131,000 after buying an additional 2,164 shares during the period. Triumph Capital Management purchased a new position in shares of SLM in the 3rd quarter worth $69,000. Finally, Dynamic Technology Lab Private Ltd acquired a new position in SLM in the first quarter valued at $263,000. Institutional investors and hedge funds own 98.94% of the company’s stock.

More SLM News

Here are the key news stories impacting SLM this week:

• Positive Sentiment: SLM maintained or modestly raised its FY 2026 EPS guidance to 3.10-3.20, which may help reassure investors that full-year profitability remains intact despite the quarter’s miss. Sallie Mae Reports Second Quarter 2026 Financial Results
• Positive Sentiment: Coverage highlighting the stock’s undervalued case and the potential benefit from student loan reform could support sentiment by suggesting upside if policy or valuation expectations improve. SLM Heads Into Earnings On Student Loan Reform Narrative and Undervalued Debate
• Neutral Sentiment: The company declared a quarterly common dividend of $0.13 per share, reinforcing capital-return discipline but not likely to be a major near-term driver for the stock. Sallie Mae Declares Dividends on Preferred Stock Series B and Common Stock
• Negative Sentiment: Q2 results missed expectations, with EPS of $0.29 versus $0.46 expected and revenue of $401.1 million below estimates, signaling softer-than-expected operating performance. Sallie Mae misses Q2 CY2026 sales expectations
• Negative Sentiment: The weaker quarter also included a year-over-year decline in earnings and slightly lower revenue, which may keep pressure on shares until investors see a clearer turnaround. Sallie Mae misses Q2 earnings and revenue estimates

SLM Company Profile

SLM Corporation, operating as Sallie Mae Bank, is a leading U.S.-based consumer banking company specializing in education financing and related banking products. The company provides a range of private student loans for undergraduate and graduate studies, Parent PLUS loans, and specialized financing for career and certificate programs. In addition to its core lending services, Sallie Mae offers deposit products including savings accounts, checking accounts, money market accounts, certificates of deposit, and credit cards tailored to students and young adults.

Founded in 1972 as the Student Loan Marketing Association—a government-sponsored enterprise—Sallie Mae was privatized in 2004 and has since focused on expanding its private education loan offerings and digital banking solutions.