Navient (NAVI) Up 1.6% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Navient (NAVI). Shares have added about 1.6% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Navient due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Navient Q4 Earnings Beat Estimates on Lower Expenses, NII Dips Y/YNavient reported fourth-quarter 2024 adjusted earnings per share of 25 cents, surpassing the Zacks Consensus Estimate of 20 cents. It reported earnings of 70 cents in the prior-year quarter.Results were driven by a rise in other income and lower expenses. A decline in provision for loan losses was another positive. However, a decrease in NII was a headwind.GAAP net income was $24 million against a net loss of $28 million in the prior-year quarter.For 2024, adjusted earnings were $2.00 per share, which missed the Zacks Consensus Estimate of $2.41. This compares unfavorably with the $2.45 in 2023. The company reported a GAAP net income of $131 million, which declined 42.5% year over year.NII & Expenses DeclineNII declined 30.6% year over year to $134 million in the fourth quarter. It missed the Zacks Consensus Estimate of $151.05 million.In 2024, core NII was down 39.4% from the prior year to $573 million. Also, the top line missed the Zacks Consensus Estimate of $580.8 million.Total other income increased 41.9% year over year to $88 million. The rise primarily stemmed from a gain on the sale of a subsidiary.Provision for loan losses was $45 million, down 18.2% from the prior-year quarter.Total expenses decreased 25.5% year over year to $152 million.Quarterly Performance of SegmentsFederal Education Loans: The segment generated a net income of $10 million, which declined 84.1% year over year.As of Dec. 31, 2024, the company’s net FFELP loans were $30.6 billion, down 18.6% sequentially.Consumer Lending: This segment reported a net income of $37 million, which decreased 19.6% from the year-ago quarter.The private education loan delinquency rate greater than 30 days was 6.1% compared with 5.1% in the prior-year quarter.As of Dec. 31, 2024, the company’s private education loans were $15.7 billion, which decreased 7% from the prior quarter. Navient originated $322 million of private education refinance loans in the reported quarter.Business Processing: The company reported a segmental net loss of $20 million against a net income of $8 million in the year-ago quarter.Liquidity ProfileTo meet liquidity needs, Navient expects to utilize various sources, including cash and investment portfolio, predictable operating cash flows provided by operating activities, the repayment of principal on unencumbered education loan assets, and distributions from securitization trusts. It may also draw down on the secured FFELP Loan and Private Education Loan facilities, issue term asset-backed securities (ABS), enter additional Private Education Loan and ABS repurchase facilities, or issue additional unsecured debt.Notably, it had $722 million of total unrestricted cash and liquid investments as of Dec. 31, 2024.Capital Distribution ActivitiesIn the fourth quarter, the company paid out $17 million in common stock dividends.In the reported quarter, Navient repurchased shares of common stock for $65 million.How Have Estimates Been Moving Since Then?It turns out, estimates review have trended downward during the past month.The consensus estimate has shifted -69.77% due to these changes.VGM ScoresAt this time, Navient has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Navient has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerNavient is part of the Zacks Financial - Consumer Loans industry. Over the past month, Sallie Mae (SLM), a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended December 2024 more than a month ago.Sallie Mae reported revenues of $362.19 million in the last reported quarter, representing a year-over-year change of -6.1%. EPS of $0.50 for the same period compares with $0.72 a year ago.Sallie Mae is expected to post earnings of $1.08 per share for the current quarter, representing a year-over-year change of -15%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.Sallie Mae has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Navient Corporation (NAVI): Free Stock Analysis Report SLM Corporation (SLM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks