Sallie Mae Q2 EPS Misses Consensus by 34%, Net Income Falls 18%; Full-Year Guidance Reaffirmed
SLM sits 28% above its 52-week low of $17.77 on elevated volume (1.9× avg).
Summary
Sallie Mae reported Q2 2026 EPS of $0.29, missing the $0.44 consensus, as net income fell 18% to $54.9 million. Higher credit costs and charge-offs weighed on results, but full-year guidance was reaffirmed.
Key Events · Earnings and Guidance · SLM
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Q2 EPS Misses Consensus
GAAP diluted EPS of $0.29 fell 34% short of the $0.44 consensus estimate, with net income declining 18% to $54.9 million.
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Credit Costs Surge
Net charge-offs rose to $113 million from $149 million in the year-ago quarter, driven by misaligned third-party debt resolution practices affecting a small, high-ability-to-pay borrower segment.
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Full-Year Guidance Reaffirmed
Management maintained 2026 guidance of $3.10-$3.20 diluted EPS, 12%-14% origination growth, $365-$385 million net charge-offs, and $750-$780 million non-interest expenses.
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Originations Growth Continues
Private Education Loan originations grew 4.5% year-over-year, supported by product enhancements and investments ahead of peak season.
Analysis · SLM · Finance
A wide miss against analyst estimates marked Sallie Mae's second quarter, with EPS coming in at $0.29 versus the $0.44 consensus. Net income dropped 18% to $54.9 million, pressured by higher provisions for credit losses and a jump in net charge-offs to $113 million. The charge-off increase was attributed to misaligned third-party debt resolution practices affecting a small, high-ability-to-pay borrower segment. Despite the shortfall, management reaffirmed full-year 2026 guidance of $3.10–$3.20 diluted EPS, signaling confidence that the credit issues are contained and origination growth remains on track. The quarter also saw completion of a $200 million accelerated share repurchase, with $242 million remaining under the buyback program, providing some support to the stock.
At the time of this filing, SLM was trading at $22.78 on NASDAQ in the Finance sector, with a market capitalization of approximately $4.6B. The 52-week trading range was $17.77 to $33.50. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.