SLM Corporation
SLM Corporation Fundamental Analysis
SLM Corporation (SLM) shows strong financial fundamentals with a PE ratio of 6.23, profit margin of 33.13%, and ROE of 31.01%. The company generates $2.2B in annual revenue with moderate year-over-year growth of 4.10%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 72.0/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze SLM's fundamental strength across five key dimensions:
Efficiency Score
WeakSLM struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSLM trades at attractive valuation levels.
Growth Score
ModerateSLM shows steady but slowing expansion.
Financial Health Score
ExcellentSLM maintains a strong and stable balance sheet.
Profitability Score
ExcellentSLM achieves industry-leading margins.
Key Financial Metrics
Is SLM Expensive or Cheap?
P/E Ratio
SLM trades at 6.23 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, SLM's PEG of 0.21 indicates potential undervaluation.
Price to Book
The market values SLM Corporation at 1.90 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 15.62 times EBITDA. This signals the market has high growth expectations.
How Well Does SLM Make Money?
Net Profit Margin
For every $100 in sales, SLM Corporation keeps $33.13 as profit after all expenses.
Operating Margin
Core operations generate 26.22 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $31.01 in profit for every $100 of shareholder equity.
ROA
SLM Corporation generates $2.53 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
SLM Corporation generates strong operating cash flow of $622.89M, reflecting robust business health.
Free Cash Flow
SLM Corporation generates strong free cash flow of $622.89M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.30 in free cash annually.
FCF Yield
SLM converts 13.80% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
6.23
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.21
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.90
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.09
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.20
vs 25 benchmark
Current Ratio
Current assets to current liabilities
13.93
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.31
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How SLM Stacks Against Its Sector Peers
| Metric | SLM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 6.23 | 19.02 | Better (Cheaper) |
| ROE | 31.01% | 815.00% | Weak |
| Net Margin | 33.13% | 1816.00% | Weak |
| Debt/Equity | 0.20 | 0.98 | Strong (Low Leverage) |
| Current Ratio | 13.93 | 670.62 | Strong Liquidity |
| ROA | 2.53% | -24633.00% (disorted) | Weak |
SLM outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews SLM Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
145.97%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
56.66%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
683.58%
Industry Style: Value, Dividend, Cyclical
High Growth