SLM Corporation Common Stock (SLM)

FairStock Score: 82/100 — HIGH CONVICTION

Key Financials

Strengths

• High return on equity of 32.3% demonstrating efficient capital deployment
• Healthy net profit margin of 18.4% showing consistent profitability
• Revenue growth of 16.4% demonstrates strong top-line momentum
• Attractive 2.3% dividend yield providing steady income returns
• FairStock composite score of 82/100 places it in the top tier across value, quality, and momentum factors

Concerns

• High leverage at 2.40x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.4 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

SLM Corporation Common Stock is a small-cap financial services company valued at $4.6 billion. The business generates $1.7 billion in annual revenue with a 18.4% net margin. From a quality standpoint, SLM shows distressed Altman Z-Score of 0.4 warrants caution and strong 32% ROE. On valuation, the stock is deeply undervalued on a P/E basis at 6.8x, with a modest 27% margin of safety vs Graham Number. Growth dynamics show revenue growing at 16.4% and profit growth of 109.0%. The 2.3% dividend yield adds an income component for patient holders. Our composite FairStock Score of 82/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

SLM's 16% revenue growth trajectory could accelerate as it captures additional market share in the financial services sector. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Elevated leverage at 2.4x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer