How SLM's Return to Profitability and Share Buybacks Has Changed Its Investment Story (SLM)

• SLM Corporation recently reported third-quarter 2025 results, turning last year’s net loss into a net income of US$135.85 million and completing a significant share repurchase tranche with over 5.6 million shares bought back for US$165.86 million.
• This financial turnaround, combined with ongoing buybacks, reflects growing management confidence and suggests an emphasis on returning value to shareholders.
• We'll consider how SLM's shift to profitability and share repurchases could reshape its investment narrative and growth outlook.

Find companies with promising cash flow potential yet trading below their fair value.

SLM Investment Narrative Recap

For investors in SLM Corporation, the central thesis is that federal student loan reforms are expanding the private lending market, and SLM’s scale and digital capabilities could allow it to capture a significant share of that incremental volume. The recent return to profitability and continued share buybacks reinforce management’s shareholder focus, but they do not materially change the most important short term catalyst: execution on capturing loan growth from policy shifts. The biggest near-term risk remains intensifying competition and potential margin pressure as new entrants seek to gain share.

Of SLM’s latest updates, the announcement and ongoing execution of its buyback plan stand out. Redeeming another 5.6 million shares for US$165.86 million during Q3 brings total repurchases to nearly 10% of outstanding shares since early 2024. While this reduces share count and may signal confidence, its impact is best understood alongside the company’s ability to turn expanded loan opportunities into sustainable earnings.

However, investors should also be mindful of the potential for increased competition to pressure SLM’s pricing power and returns...

Read the full narrative on SLM (it's free!)

SLM's outlook anticipates $2.0 billion in revenue and $918.9 million in earnings by 2028. This is based on an assumed 17.4% annual revenue growth rate and represents a $493.6 million increase in earnings from the current level of $425.3 million.

Uncover how SLM's forecasts yield a $34.73 fair value, a 27% upside to its current price.

Exploring Other Perspectives

Two perspectives from the Simply Wall St Community put SLM’s fair value between US$34.73 and US$54.81 per share. While many see value, the major catalyst is SLM’s opportunity to grow loan originations as federal lending shrinks, which could impact future earnings and price targets.

Explore 2 other fair value estimates on SLM - why the stock might be worth over 2x more than the current price!

Build Your Own SLM Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your SLM research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.
• Our free SLM research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SLM's overall financial health at a glance.

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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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