NAVI: Federal Loan Sales And Buybacks Will Shape Balanced Future Outlook

Analyst Price Target Update

Analysts have trimmed their price target on Navient slightly, to approximately $12.72 from about $12.89, as they factor in stronger projected revenue growth, slightly lower expected profit margins, and a modestly reduced future earnings multiple.

What's in the News

• White House officials are reportedly considering selling high performing portions of the federal government's $1.6 trillion student loan portfolio to private lenders, potentially expanding market opportunities for servicers such as Navient (Politico)
• Navient completed repurchases of 2,000,000 shares in the third quarter of 2025 for $26.38 million, bringing total buybacks under its December 2021 authorization to 61,032,748 shares, or about 48.64% of shares outstanding (company filing)
• The Board of Directors authorized a new share repurchase program of up to $100 million on October 29, 2025, reflecting continued emphasis on returning capital to shareholders (company announcement)
• Navient reported third quarter 2025 net charge offs of $105 million, roughly flat compared to $104 million in the prior year period (earnings release)
• The company issued fourth quarter 2025 earnings guidance of $0.30 to $0.35 per share, providing investors with a clearer view of near term profitability expectations (earnings guidance)

Valuation Changes

• The fair value estimate has decreased slightly to approximately $12.72 from about $12.89, reflecting modestly tighter assumptions.
• The discount rate remains unchanged at 12.5%, indicating no shift in the assumed risk profile or cost of equity.
• Revenue growth has risen meaningfully to about 17.5% from roughly 15.0%, incorporating stronger top line expectations.
• The net profit margin has fallen moderately to roughly 37.8% from about 40.3%, reflecting expectations for higher costs or less operating leverage.
• The future P/E multiple has edged down slightly to around 5.60x from roughly 5.67x, signaling a small contraction in the expected valuation multiple.