Navient (NAVI): Assessing Value After Third Quarter Misses and Unexpected Net Loss

Navient (NAVI) shares slipped after the company posted a third quarter net loss, falling short of consensus estimates on both earnings and revenue. Higher loan loss reserves and declining sales weighed on the results.

See our latest analysis for Navient.

After a choppy year, Navient’s share price has lost ground, posting a 1-year total shareholder return of -8.5% and a year-to-date share price decline of 6.4%. Even though the company completed more share buybacks and loan originations are growing, momentum has faded as investors digest persistent losses and lingering risk from older loan portfolios.

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With another quarter of disappointing results now on the table, investors are facing a familiar dilemma. Is Navient’s battered share price now too low compared to its underlying potential, or is the market already accounting for future growth risks?

Most Popular Narrative: 5.9% Undervalued

With Navient last closing at $12.23, the most widely followed narrative estimates a fair value of $13.00, pointing to modest upside. This sets the tone for a debate on how far growth and profitability could stretch in the coming years.

“Revenue Growth projection has increased substantially from 4.6% to 17.9%. This reflects heightened expectations for top-line expansion. Net Profit Margin estimate has jumped from 48.2% to 95.0%. This signals improved profitability assumptions moving forward.”

Read the complete narrative.

Want to see what’s fueling this hot take? The boldest numbers are not just about profitability, as they rewrite Navient’s future playbook. Curious where these assumptions lead? See what’s behind these stunning projections for revenue, margin, and future profits.

Result: Fair Value of $13.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistently high delinquency rates and unpredictable regulatory changes could quickly undermine these upbeat projections and stall Navient’s current momentum.

Find out about the key risks to this Navient narrative.

Another View: Multiples Point to Caution

Looking at Navient’s price-to-sales ratio, the stock trades at 5.3x, much higher than the US Consumer Finance industry average of 1.3x and above its fair ratio of 3.7x. This means investors are paying a steep premium compared to both industry norms and the market’s likely destination. Could this premium hold up as business conditions evolve?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Navient Narrative

If the numbers or stories above do not reflect your perspective, you can dig into the data and shape your own take in just a few minutes. Do it your way.

A great starting point for your Navient research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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