SLM (NASDAQ:SLM) Releases Quarterly Earnings Results, Misses Estimates By $0.17 EPS

SLM (NASDAQ:SLM) issued its 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. SLM had a return on equity of 34.07% and a net margin of 26.09%.The firm had revenue of $401.11 million for the quarter, compared to analysts’ expectations of $409.22 million. During the same quarter in the previous year, the firm posted $0.32 EPS. The firm’s revenue for the quarter was down .7% compared to the same quarter last year. 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 Trading Up 0.5%

NASDAQ SLM opened at $24.29 on Friday. The company has a debt-to-equity ratio of 2.59, a quick ratio of 1.29 and a current ratio of 1.30. SLM has a one year low of $17.77 and a one year high of $33.49. The company has a 50-day simple moving average of $23.57 and a 200-day simple moving average of $23.32. The firm has a market capitalization of $4.58 billion, a PE ratio of 6.78, a price-to-earnings-growth ratio of 2.21 and a beta of 0.94.

SLM Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, September 15th. Stockholders of record on Friday, September 4th will be given a $0.13 dividend. This represents a $0.52 dividend on an annualized basis and a dividend yield of 2.1%. The ex-dividend date is Friday, September 4th. SLM’s dividend payout ratio (DPR) is presently 14.53%.

Analysts Set New Price Targets

Several brokerages have recently weighed in on SLM. Weiss Ratings raised SLM from a “hold (c)” rating to a “hold (c+)” rating in a research report on Thursday, June 18th. Wall Street Zen lowered shares of SLM from a “hold” rating to a “sell” rating in a report on Saturday. JPMorgan Chase & Co. boosted their price target on SLM from $24.00 to $25.00 and gave the stock an “underweight” rating in a research note on Monday, July 13th. Compass Point raised SLM from a “sell” rating to a “neutral” rating and cut their target price for the company from $23.00 to $22.00 in a research report on Monday, March 30th. Finally, Wells Fargo & Company set a $28.00 price target on shares of SLM in a research note on Friday. Five analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus price target of $29.80.

Key Headlines Impacting SLM

Here are the key news stories impacting SLM this week:

• Positive Sentiment: SLM reaffirmed/issued FY 2026 EPS guidance of 3.10 to 3.20, which is roughly in line with consensus and may help limit downside if investors focus on the full-year outlook rather than the quarter. Sallie Mae Reports Second Quarter 2026 Financial Results
• Positive Sentiment: The company also highlighted loan origination growth, showing the underlying lending franchise is still expanding even as earnings were weak. Sallie Mae Q2 Earnings Miss Estimates, NII Dips, Expenses Rise Y/Y
• Neutral Sentiment: Investor focus remains split between the “student loan reform” narrative and valuation arguments, which may be supporting some longer-term interest in the stock despite the weak quarter. SLM (SLM) Heads Into Earnings On Student Loan Reform Narrative and Undervalued Debate
• Negative Sentiment: SLM reported Q2 EPS of $0.29 versus estimates of $0.46, while revenue of $401.1 million also missed expectations, reinforcing concerns about near-term earnings momentum. SLM earnings report and conference call
• Negative Sentiment: Management cited lower net interest income, rising expenses, and margin pressure, all of which weigh on profitability and help explain why the stock is moving lower. Sallie Mae (SLM) Misses Q2 Earnings and Revenue Estimates

Hedge Funds Weigh In On SLM

Hedge funds and other institutional investors have recently bought and sold shares of the stock. Entropy Technologies LP lifted its holdings in shares of SLM by 616.6% in the 3rd quarter. Entropy Technologies LP now owns 109,485 shares of the credit services provider’s stock worth $3,031,000 after purchasing an additional 94,207 shares during the last quarter. Goldman Sachs Group Inc. increased its holdings in shares of SLM by 33.4% in the 1st quarter. Goldman Sachs Group Inc. now owns 547,724 shares of the credit services provider’s stock worth $16,087,000 after acquiring an additional 137,285 shares during the period. Captrust Financial Advisors lifted its position in SLM by 31.3% in the 4th quarter. Captrust Financial Advisors now owns 53,673 shares of the credit services provider’s stock valued at $1,452,000 after purchasing an additional 12,793 shares during the last quarter. Dynamic Technology Lab Private Ltd bought a new position in SLM in the 1st quarter worth about $263,000. Finally, NewEdge Advisors LLC raised its holdings in shares of SLM by 6.6% during the first quarter. NewEdge Advisors LLC now owns 21,350 shares of the credit services provider’s stock valued at $627,000 after buying an additional 1,319 shares during the last quarter. 98.94% of the stock is currently owned by institutional investors and hedge funds.

About SLM

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.