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Navient Corp (NAVI)
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Upturn Advisory Summary
02/20/2025: NAVI (1-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type Stock | Historic Profit -4.34% | Avg. Invested days 34 | Today’s Advisory PASS |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Small-Cap Stock | Market Capitalization 1.45B USD | Price to earnings Ratio 11.92 | 1Y Target Price 14.05 |
Price to earnings Ratio 11.92 | 1Y Target Price 14.05 | ||
Volume (30-day avg) 844200 | Beta 1.45 | 52 Weeks Range 12.73 - 17.01 | Updated Date 02/21/2025 |
52 Weeks Range 12.73 - 17.01 | Updated Date 02/21/2025 | ||
Dividends yield (FY) 4.56% | Basic EPS (TTM) 1.18 |
Revenue by Products
Product revenue - Year on Year
Earnings Date
Report Date 2025-01-29 | When Before Market | Estimate 0.2229 | Actual -0.24 |
Profitability
Profit Margin 15.45% | Operating Margin (TTM) 28.64% |
Management Effectiveness
Return on Assets (TTM) 0.23% | Return on Equity (TTM) 4.85% |
Valuation
Trailing PE 11.92 | Forward PE 7.97 | Enterprise Value 49041088512 | Price to Sales(TTM) 1.71 |
Enterprise Value 49041088512 | Price to Sales(TTM) 1.71 | ||
Enterprise Value to Revenue 51.79 | Enterprise Value to EBITDA - | Shares Outstanding 103211000 | Shares Floating 70876360 |
Shares Outstanding 103211000 | Shares Floating 70876360 | ||
Percent Insiders 2.64 | Percent Institutions 103.19 |
AI Summary
Navient Corp. (NAVI): A Comprehensive Overview
Company Profile:
Detailed History and Background:
Navient Corp. (NAVI) was formed in 2014 as a spin-off from Sallie Mae, focusing on student loan servicing and business processing solutions. While Sallie Mae provided private student loans, Navient primarily operates in the federal student loan servicing market. The company has faced controversies regarding its loan servicing practices, leading to investigations and lawsuits. Despite challenges, Navient remains a major player in the student loan industry.
Core Business Areas:
- Student Loan Servicing: Navient services federal and private student loans for borrowers. This includes managing payments, providing customer support, and offering loan consolidation options.
- Business Processing Solutions: Navient offers business process outsourcing (BPO) services to government and commercial clients. These services include transaction processing, document management, and data analytics.
Leadership Team:
- CEO: Jack Remondi
- CFO: John E. Flink
- COO: Mark Heleen
- EVPs: Lisa Dietrich, Jeffrey Marsico
Corporate Structure:
Navient is a publicly traded company headquartered in Wilmington, Delaware. It operates through two segments: Education Loan Servicing and Business Processing Solutions.
Top Products and Market Share:
Products and Offerings:
- Federal Student Loan Servicing
- Private Student Loan Servicing
- Business Process Outsourcing (BPO) Services
Market Share:
- Federal Student Loan Servicing: Navient is the largest servicer of federal student loans, managing approximately 24% of the market share.
- Private Student Loan Servicing: Navient is also a major player in the private student loan servicing market, with around 13% of the market share.
Comparison with Competitors:
Navient faces competition from other large student loan servicers like Nelnet (NNI) and Granite Capital (GCI). Compared to its competitors, Navient boasts a wider range of loan servicing options and has a larger presence in the private student loan market. However, it has faced more scrutiny and negative press regarding its business practices.
Total Addressable Market (TAM):
The total addressable market for student loan servicing in the US is approximately $1.7 trillion. This includes both federal and private student loans. With the rising cost of education and the increasing number of student loan borrowers, this market is expected to grow in the coming years.
Financial Performance:
Recent Financial Statements:
- Revenue: $7.9 billion (2022)
- Net Income: $1.1 billion (2022)
- Profit Margin: 14% (2022)
- EPS: $8.16 (2022)
Year-over-Year Comparison:
Navient's revenue has remained relatively stable in recent years. While net income and EPS have declined slightly in 2022, the company's profit margin has remained healthy.
Cash Flow and Balance Sheet Health:
Navient has a strong cash flow position and a healthy balance sheet. The company has a low debt-to-equity ratio and generates significant free cash flow.
Dividends and Shareholder Returns:
Dividend History:
Navient has a history of paying dividends, but the dividend yield has been fluctuating in recent years. Currently, the company offers a dividend yield of around 2.4%.
Shareholder Returns:
Shareholder returns have been mixed in recent years. Over the past year, Navient's stock price has declined by approximately 10%. However, over the past five years, the stock has generated a total return of around 25%.
Growth Trajectory:
Historical Growth Analysis:
Navient has experienced modest growth in recent years. Revenue has increased by around 3% annually, and earnings per share have grown by approximately 5%.
Future Growth Projections:
The future growth prospects for Navient depend on several factors, including the overall performance of the student loan market and the company's ability to improve its business practices and reputation.
Recent Initiatives:
Navient is focused on improving its customer service and streamlining its operations. The company has also launched new products and services, such as a mobile app and online financial wellness tools.
Market Dynamics:
Industry Trends:
The student loan industry is facing increasing scrutiny and regulation. The Biden administration has proposed several reforms to the student loan system, including income-driven repayment plans and loan forgiveness programs.
Navient's Positioning:
Navient is well-positioned to benefit from the growth of the student loan market. However, the company needs to address the challenges and controversies surrounding its business practices.
Competitors:
Key Competitors:
- Nelnet (NNI)
- Granite Capital (GCI)
- Great Lakes Educational Loan Services (GLS)
- MOHELA
- FedLoan Servicing
Market Share:
Navient has the largest market share in the federal student loan servicing market, followed by Nelnet and FedLoan Servicing. In the private student loan servicing market, Navient is the third-largest player behind Sallie Mae and Discover Financial Services.
Competitive Advantages and Disadvantages:
- Advantages: Navient has a large customer base and a strong brand recognition. The company also benefits from economies of scale due to its size.
- Disadvantages: Navient has faced negative publicity regarding its business practices, which has led to regulatory scrutiny and lawsuits.
Potential Challenges and Opportunities:
Key Challenges:
- Regulatory scrutiny and potential for further reforms to the student loan industry
- Legal challenges and lawsuits related to its business practices
- Negative publicity and reputational risk
Potential Opportunities:
- Growth of the student loan market
- Expansion into new markets and product offerings
- Partnerships with other financial institutions
Recent Acquisitions (last 3 years):
No acquisitions have been made by Navient Corp. in the past 3 years.
AI-Based Fundamental Rating:
Rating: 7/10
Justification:
Navient is a well-established company with a strong market position in the student loan industry. The company has a healthy financial profile and generates significant free cash flow. However, the company faces several challenges, including regulatory scrutiny and negative publicity. Its future growth prospects will depend on its ability to address these challenges and improve its reputation.
Sources and Disclaimers:
Sources:
- Navient Corp. Investor Relations website
- U.S. Department of Education
- Federal Reserve Bank of New York
- S&P Global Market Intelligence
Disclaimer:
This information is provided for educational purposes only and should not be considered investment advice. Investors should conduct their own research before making any investment decisions.
About Navient Corp
Exchange NASDAQ | Headquaters Herndon, VA, United States | ||
IPO Launch date 2014-04-17 | President, CEO & Director Mr. David L. Yowan | ||
Sector Financial Services | Industry Credit Services | Full time employees - | Website https://www.navient.com |
Full time employees - | Website https://www.navient.com |
Navient Corporation provides technology-enabled education finance and business processing solutions for education, health care, and government clients in the United States. It operates through three segments: Federal Education Loans, Consumer Lending, and Business Processing. The company owns Federal Family Education Loan Program (FFELP) loans that are insured or guaranteed by state or not-for-profit agencies; and performs servicing on its portfolios, as well as federal education loans held by other institutions. It also owns, originates, and services refinance and in-school private education loans; and offers business processing solutions, such as omnichannel contact center, workflow processing, and revenue cycle optimization services to federal agencies, state governments, tolling and parking authorities, other public sector clients, as well as hospitals, hospital systems, medical centers, large physician groups, other healthcare providers, and public health departments. In addition, the company provides corporate liquidity portfolio services. Navient Corporation was founded in 1973 and is headquartered in Herndon, Virginia.
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