Student loan provider Sallie Mae (NASDAQ: SLM) will be reporting results this Thursday after market hours. Here’s what to expect.
Sallie Mae missed analysts’ revenue expectations last quarter, reporting revenues of $401.1 million, flat year on year. It was a softer quarter for the company, with a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates.
Is Sallie Mae a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Sallie Mae’s revenue to decline 16.1% year on year, a reversal from the 42.1% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Sallie Mae has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Sallie Mae’s peers in the consumer finance segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Capital One delivered year-on-year revenue growth of 5.5%, meeting analysts’ expectations, and Synchrony Financial reported flat revenue, in line with consensus estimates.
Read our full analysis of Capital One’s results here and Synchrony Financial’s results here.
In the last twelve months or so, the market has shifted its attention from one area of macro importance to the next (AI disintermediation and AI capex spending to geopolitical conflict, rates, and whether the economy is on solid footing or not). While some of the consumer finance stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 2.3% on average over the last month. Sallie Mae is down 12.5% during the same time and is heading into earnings with an average analyst price target of $28.36 (compared to the current share price of $21.94).
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