Aug. 2 at 12:25 PM
SLM Corporation (SLM)
$SLM
When calculating the P/E ratio after netting out cash on the balance sheet, we find that the P/E is approximately 8.8x. Compared to its peer Nelnet (NNI), which trades at around 14.5x – 16.0x, SLM Corporation is still significantly cheaper, with a Margin of Safety (MoS) of ~30%. The company holds a 63% market share, and we are also receiving positive news regarding H.R. 1, the "One Big Beautiful Bill" related to Grad PLUS loans.
$SLM is expected to see originations increase by as much as 70%.
In addition, the company continues its share buyback program.
FY2026 EPS guidance is
$3.10–
$3.20, which appears lower than FY2025 because FY2025 included unusually large gains. If we exclude the one-off loan sale gains and look only at the core business:
Net Interest Income is projected at
$362M–
$377M per quarter consistently over the past 8 quarters — which reflects that the core business remains truly strong.