Compass Point Analysts Bullish on SLM Corporation’s Share Buyback Prospects
April 15, 2023
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Compass Point analysts are giving a bullish outlook on SLM ($NASDAQ:SLM) Corporation’s potential for share buybacks. SLM Corporation, or SLM, is a financial services provider that specializes in student loan and education financing. Following an analysis of SLM’s financials, Compass Point has upgraded the company to a Buy rating, citing the significant potential for share buybacks. Share buybacks can be a wise investment for companies, as it allows them to return capital to shareholders without the need for additional debt. SLM has a strong balance sheet and low debt-to-equity ratio which allow it to effectively manage its capital and return money to shareholders.
Additionally, the company’s strong business model and solid revenues give it the room to execute share buybacks without compromising its financial position. Compass Point’s bullish outlook on SLM Corporation’s prospects for share buybacks is based on the company’s history of prudent and effective management of its finances. With a strong balance sheet and a solid business model, SLM is well-positioned to use share buybacks as an effective means of delivering returns to shareholders.
Market Price
On Friday, SLM CORPORATION stock opened at $14.2 and ended the day closing at $14.3, a 4.1% increase from the previous day’s closing price of 13.8. This unexpected surge in the stock price has attracted investor attention and further strengthened the stock buyback prospects of SLM Corporation. Analysts believe that the buyback program could potentially drive a rally in the stock and attract more investors in the future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Slm Corporation. More…
| Total Revenues | Net Income | Net Margin |
| 1.82k | 459.99 | 25.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Slm Corporation. More…
| Operations | Investing | Financing |
| 4.99 | 1.08k | -854.89 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Slm Corporation. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 28.81k | 27.08k | 7.92 |
Key Ratios Snapshot
Some of the financial key ratios for Slm Corporation are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 2.9% | – | – |
| FCF Margin | ROE | ROA |
| 0.3% | 21.3% | 1.4% |
Analysis
At GoodWhale, we conducted an analysis of SLM CORPORATION‘s wellbeing, and discovered that its financial health score is 1/10. This low score has to do with the company’s cashflows and debt levels, indicating that it is less likely to safely ride out any crisis without the risk of bankruptcy. We used a Star Chart to assess the strengths and weaknesses of SLM CORPORATION, and found that it is strong in dividend and weak in asset, growth and profitability. As a result, we have classified the company as a “cow” – a type of company that has a track record of paying out consistent and sustainable dividends. Given this information, investors who are looking for steady and reliable income may wish to consider investing in SLM CORPORATION. Those who are more interested in high returns, however, may wish to look elsewhere. In any case, further research should be conducted before any decisions are made. More…
Peers
SLM Corp competes with Nelnet Inc, ZENKOKU HOSHO Co Ltd, and Harmoney Corp Ltd in the student loan industry. All four companies offer student loan products and services to customers in the United States and around the world. While each company has its own strengths and weaknesses, SLM Corp has been able to maintain a competitive edge through its focus on technology and innovation.
– Nelnet Inc ($NYSE:NNI)
Nelnet is a publicly traded student loan servicing company based in the United States. The company services student loans on behalf of the US Department of Education and private lenders. Nelnet also provides tuition payment processing and related services to educational institutions. As of December 31, 2020, Nelnet had $313 billion in student loan assets under management.
Nelnet’s market cap is $3.16 billion as of 2022. The company has a strong presence in the student loan servicing industry and is known for its efficient management of student loan assets. Nelnet is well-positioned to continue growing its market share in the student loan servicing industry.
– ZENKOKU HOSHO Co Ltd ($TSE:7164)
ZENKOKU HOSHO Co Ltd is a Japanese real estate company with a market cap of 329.14B as of 2022. The company’s ROE is 14.07%. The company is engaged in the business of leasing, managing, and developing office buildings, retail properties, and residential properties.
– Harmoney Corp Ltd ($NZSE:HMY)
Harmoney Corp Ltd is a financial services company that offers a range of products and services including loans, credit cards, and insurance. The company has a market cap of 77.78M as of 2022 and a return on equity of -0.71%. The company’s products and services are designed to meet the needs of consumers and businesses in the United Kingdom.
Summary
SLM Corporation (often referred to as Sallie Mae) has recently been upgraded to a Buy rating at Compass Point due to its potential for share buybacks. The stock price has responded positively, growing on the same day. Analysts anticipate that the share buybacks would result in higher earnings per share and return value to shareholders. It is also expected to lead to better capital returns in the near future. Considering its improved prospects, SLM Corporation may be an attractive option for investors.
However, investors should still consider other factors such as the company’s overall financial health and potential risks before making a decision.
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