Navient (NAVI) Up 5.6% Since Last Earnings Report: Can It Continue?

Core Insights - Navient reported second-quarter 2025 adjusted earnings per share (EPS) of 21 cents, missing the Zacks Consensus Estimate of 29 cents and down from 48 cents in the prior-year quarter [2] - The company's GAAP net income was $14 million compared to $36 million in the prior-year quarter [3] - The decline in net interest income (NII) and higher provisions for loan losses were significant factors affecting performance [2][4] Financial Performance - NII decreased by 3.7% year over year to $131 million, missing estimates by 9.2% [4] - Total other income fell 76.1% year over year to $28 million [4] - Provision for loan losses increased to $37 million from $14 million in the prior-year quarter [4] - Total expenses decreased by 45.4% year over year to $101 million [4] Segment Performance - Federal Education Loans segment generated a net income of $30 million, up 7.1% year over year [5] - Consumer Lending segment reported a net income of $26 million, down 56.7% from the year-ago quarter [5] - The private education loan delinquency rate greater than 30 days increased to 6.4% from 5.2% in the prior-year quarter [5] Liquidity and Capital Management - As of June 30, 2025, the company had $712 million in total unrestricted cash and liquid investments [8] - In the second quarter, Navient paid $16 million in common stock dividends and repurchased shares for $35 million [9] 2025 Outlook - Core EPS is now expected to be in the range of $0.95–$1.05, down from the previous range of $1.00–$1.20 [10] - FFELP segment NIM is now expected to be 55–65 basis points, an increase from the previous guidance of 45–60 basis points [10] - Full-year loan originations are now expected to be between $1.8 billion and $2.2 billion, compared to earlier expectations of 30% growth [11] Market Sentiment - Since the earnings release, there has been a downward trend in estimates revision, with a consensus estimate shift of -8.74% [12] - Navient has a subpar Growth Score of D and a value score of B, resulting in an aggregate VGM Score of D [13] - The stock has a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the coming months [14] Industry Comparison - Navient belongs to the Zacks Financial - Consumer Loans industry, where Capital One has gained 5.7% over the past month [15] - Capital One reported revenues of $12.49 billion, representing a year-over-year change of +31.4% [15] - The overall direction of estimate revisions for Capital One translates into a Zacks Rank 2 (Buy) [17]