Sallie Mae (SLM): Exploring Valuation After Q3 Earnings Miss, Dividend News, and Michael Burry Portfolio Disclosure

Sallie Mae (SLM) has found itself in the spotlight after releasing Q3 2025 earnings, which highlighted net income but fell short of revenue and EPS estimates. The company also declared dividends for common and preferred shareholders.

See our latest analysis for SLM.

This latest round of earnings and SLM’s inclusion in Michael Burry’s portfolio have drawn fresh eyes to the stock, but momentum has been bumpy. Despite a 17% total shareholder return over the past year, the share price is trailing its recent highs and short-term performance has cooled, even as longer-term total returns remain strong.

If you’re open to discovering what else the market is rewarding lately, now could be the perfect chance to broaden your search and uncover fast growing stocks with high insider ownership

The big question is whether SLM, currently trading at a notable discount to analyst targets and showing upward trends in its fundamentals, represents a genuine value opportunity or if the market has already accounted for future growth.

Most Popular Narrative: 22.9% Undervalued

Compared to SLM's recent closing price of $26.76, the most widely followed narrative estimate puts fair value much higher, suggesting the stock still has room to run. This positioning sets up an interesting debate about whether analysts are outpacing market caution.

The recently enacted federal student loan reforms, which cap borrowing under Parent PLUS and eliminate Grad PLUS, are expected to shift $4.5 to $5 billion in annual loan volume from the federal to the private market, directly expanding SLM's addressable market. This is poised to drive higher revenue growth beginning in 2027 as the impact phases in.

Read the complete narrative.

Curious what bold assumptions could unlock such an ambitious upside? This narrative hints at transformative catalysts and elevated profit margins behind the premium. Some of the projections will surprise you. Click to uncover the full engine driving this target price.

Result: Fair Value of $34.73 (UNDERVALUED)

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

However, persistent credit quality concerns and rising competition could limit SLM's long-term growth if market conditions or borrower trends unexpectedly worsen.

Find out about the key risks to this SLM narrative.

Build Your Own SLM Narrative

If you believe the story runs deeper or you prefer diving into the numbers firsthand, it only takes a few minutes to shape your own outlook. Do it your way

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.

Looking for More Smart Investment Ideas?

Don’t let great opportunities slip past you. Amplify your portfolio with stocks primed for growth, value, and tomorrow’s breakthroughs using the Simply Wall Street Screener.

• Get ahead with these 875 undervalued stocks based on cash flows, offering compelling value based on future cash flows and analyst forecasts.
• Capture returns from income-focused strategies when you check out these 16 dividend stocks with yields > 3%, featuring companies with strong yields above 3%.
• Ride the momentum of innovation and stay current by searching these 25 AI penny stocks for firms shaping AI-driven industries and transforming tomorrow’s economy.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com