Update shared on18 Oct 2025
Fair value Decreased 7.86%Analysts have lowered SLM's average price target from approximately $38 to $35 per share, citing recent concerns over credit performance and cautious consumer trends, even though management has reaffirmed its guidance.
Analyst Commentary
Recent analyst updates reflect a divided outlook on SLM, with some expressing optimism about long-term earnings and credit management, while others raise concerns about short-term credit trends and macroeconomic headwinds. The following summarizes the prevailing bullish and bearish takeaways from recent research.
Bullish Takeaways- Bullish analysts highlight SLM's proactive tightening of underwriting standards, viewing these measures as supporting healthy credit performance and sustainable growth.
- Near-term credit performance is seen as improving. Some analysts point to over two years of disciplined underwriting as a positive signal for future loan quality.
- Optimism persists around the company’s earnings potential. Expectations are that robust loan growth and disciplined portfolio management can offset some pressure from margin compression.
- Some view the evolving interest rate environment and improving credit commentary as reducing downside risks to SLM’s valuation. This has supported upward price target revisions.
- Bearish analysts remain cautious due to higher-than-expected delinquency rates, especially in recent months, which have exceeded typical seasonal patterns.
- Concerns have been raised about potential headwinds from the resumption of student loan repayments and a challenging employment landscape for recent graduates. These factors could weigh on near-term credit quality.
- Valuation adjustments and downgrades reflect increased uncertainty around credit performance and the potential for additional volatility in asset-backed securities.
- Some analysts have balanced their outlooks by noting that while longer-term prospects remain intact, short-term risks and weaker consumer health warrant a conservative approach to SLM’s shares.
What's in the News
- The White House is reportedly considering selling high-performing portions of its $1.6 trillion federal student loan portfolio to the private market. This could impact companies in the sector, including SLM. (Politico)
- Adtalem Global Education and Sallie Mae have signed a Letter of Intent to develop alternative financing options for healthcare students as the federal Grad PLUS program phases out starting July 1, 2026. This initiative aims to provide new funding frameworks tailored for future healthcare professionals. (Client Announcement)
- SLM completed a share repurchase of 2,366,356 shares for $69.75 million between April and June 2025, bringing the total repurchased under the ongoing buyback program to nearly 7% of outstanding shares. (Buyback Update)
Valuation Changes
- Consensus Analyst Price Target has fallen modestly from $38.18 to $35.18 per share, reflecting more cautious projections.
- Discount Rate has risen slightly from 9.14% to 9.15%, indicating a marginal increase in perceived risk.
- Revenue Growth expectation has decreased slightly from 17.50% to 17.41%.
- Net Profit Margin has edged down from 46.95% to 46.61%.
- Future P/E ratio has declined from 10.64x to 9.90x, suggesting a lower valuation multiple based on forward earnings.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.