SLM Corporation Floating Rate Non-Cumulative Preferred Stock Series B (SLMBP)

FairStock Score: 55/100 — STEADY

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 8.2% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($25) with negative 196% margin of safety—limited downside protection
• 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 Floating Rate Non-Cumulative Preferred Stock Series B is a small-cap financial services company valued at $4.8 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 trading at a premium 34.7x earnings, with trades far above its Graham Number ($25) with no margin of safety. Growth dynamics show revenue growing at 16.4% and profit growth of 109.0%. The 8.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 55/100 reflects mixed 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

At 35x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. 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