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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Slm Corporation (XNAS:SLM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SLM
Name:
SLM CORPORATION (XNAS:SLM)
Sector:
62.79M
Industry:
Credit Services
CEO:
Dr. Raymond Quinlan
Total Employees:
1,450
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -201.60% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SLM CORPORATION(SLM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
14.68
One Month Price Target:
$14.78
Six Month Price Target :
$15.26
Likely Price in One Year's Time:
Ticker:
$15.84
Likely Trading Range Today Under (Normal Volatility)
$14.63
Price Upper limit ($) :
$14.77
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$13.84
This week:
$12.79
This month :
$10.91
Other Primary facts
Market Cap:
3.66B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
251.38M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
29.26%
-17.8%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$18.59
$16.77
$10.77
$12.59
Medium risk (<10%) entry points
Buy Call
Sell Call
$16.18
Buy Put:
Sell Put:
$15.79
$13.17
$13.57
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SLM
Sharpe Ratio:
3.77%
Comparison:
SLM, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 102.96% higher than the industry
& ratio is 65.53% higher than the market/S&P 500 average
Average Returns/Yield of
SLM
Daily returns:
0.12%
Weekly returns:
0.58%
Monthly returns:
2.33%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is 46.69% above industry average
Classification:
SLM, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.31
Statistical test of Returns:
SLM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.85%
Weekly Volatility:
6.38%
Monthly Volatility:
12.76%
Yearly Volatility:
44.21%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.30%
Volatility in last five trading days has been -19.40% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.74%
Weekly VaR:
-12.84%
Monthly VaR:
-25.69%
How Much Can the price of
SLM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-88.99%
This translates to price declining to:
$11.54
This translates to price declining to:
$1.62
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SLM is a 81.31% riskier investment compared to the market/S&P 500 & is 55.33% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -13.53% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SLM
Beta in relation to market/S&P 500--1.18
Expected beta in 1 year's time:
0.977
Expected beta in 3 year's time:
1.381
Unlevered (debt free) Beta:
0.597
Beta in relation to Nasdaq (XNAS):
0.81
Beta in relation to all global stocks::
0.649
Beta Comparison & Analysis
Beta of competitors/peers::
1.132
Beta is 4.07% higher than peers
Average Industry Beta:
1.332
Beta is -11.59% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
47.89%
Sustainable growth rate is 41.93% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.167
Alpha is 146.69% above industry average alpha yield
Alpha is 1066% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SLM
Equity cost of capital:
0.112
Equity cost of capital is -8.61% below industry mean WACC
Unlevered (without debt) cost of capital:
5.69%
Before-tax cost of debt:
5.04%
After-tax cost of debt:
3.98%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.98%
WACC is 21.06% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$7.02
Revenue growth rate per share of (3Y):
1.81
Annual revenue growth rate is -29.10% below industry average
EPS:
$2.17
Expected Annual growth rate of EPS (3Y):
40.20%
Expected future EPS growth rate is 60.42% higher than the Credit Services industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 504.75%
Equity growth rate per share is 2020.28% higher than the industry
Debt per share
$22.09
EBITDA per share
$5.60
Valuation Analysis Today of
SLM
P/E Ratio:
4.87
P/E Ratio of Competitors/Peers:
11.75
P/E ratio is -58.60% lower than main peers & is -59.91% lower than the industry
Stock price/value with industry average P/E ratio: $26.34
SLM is -44.26% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.09
Price to sales ratio is -59.77% below the industry mean
P/B (Price to book value ratio):
1.81
-
Price to free cash flow ratio is -88.41% lower than the industry
Net income growth rate (3Y):
245.36%
Net income growth rate is 1419.12% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 3.41%
Dividend yeild: 2.45%
Previous Dividend: $0.11
Previous adjusted dividend: $0.11
Previous Dividend: $0.36
Expected next dividend best case: $0.14
Expected next dividend worst case: $0.08
Average dividend payment (long-term): $0.05
Average dividend increase/decrease (growth rate) % per period: 26.67%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 09/01/2022
-
Previous dividend payment date: 15/06/2022
Previous dividend record date: 06/03/2022
-
Dividend History:
2022-06-02--$0.11
2021-12-02--$0.11
2021-06-03--$0.03
2022-03-03--$0.11
2021-09-02--$0.03
2021-03-04--$0.03
Dividend growth rate is -378.75% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
129.16%
Net debt to equity ratio:
53.27%
Debt to assets ratio:
19.11%
Net debt to assets ratio:
7.88%
Debt-to-asset ratio is -75.48% below industry average
Ability to repay debt:
Interest coverage ratio:
5.03
Interest coverage ratio is -48.79% less than industry average
Looking forward:
Debt growth rate:
14.29%
Annual debt growth is -71% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.587
Statistical significance of correlation:
SLM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is 4.61% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.028
Covariance of price movement with the market:
0.046
Kurtosis
19.374
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.199
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
SLM
Gross Profit Margin Ratio:
175%
Operating Profit Margin Ratio:
38.02%
Operating profit margin is 30.75% higher than the industry
Net Profit Margin Ratio:
175%
Effective Tax Rate:
24.79%
Effective tax rate is 14.47% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.80%
Return on equity (ROE) is -50.93% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.08%
Return on assets (ROA) is -49.20% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 8.5 years
Stock based compensation to net income ratio:
1.33%
In-depth Efficiency Analysis
Revenue generated per employee:
1.2M
Each employee generates 68% more revenue than industry average revenue per employee
EBITDA generated per employee:
971.1K
Each employee generates 131% more EBITDA than industry average revenue per employee
Profit generated per employee:
616.8K
Each employee generates 155% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
43.3K
Each employee generates -26% less free cash flow than industry average revenue per employee
Assets/Capital per employee
86.4K
Each employee generates -26% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SLM
PACWEST BANCORP (XNAS:PACW)
VALLEY NATIONAL BANCORP (XNAS:VLY)
KL ACQUISITION UNT (XNAS:KLAQU)
WINTRUST FINANCIAL CORPORATION (XNAS:WTFC)
SOUTHSTATE CORPORATION (XNAS:SSB)
ACE CONVERGENCE ACQUISITION UNT (XNAS:ACEVU)
Bank Ozk (XNAS:OZK)
GLACIER BANCORP, INC. (XNYS:GBCI)
HUDSON EXECUTIVE INVESTMENT UNT (XNAS:HIIIU)
Current Analyst Ratings
Strong buy�17%
Buy�21%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.76B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
129.88M
934.80M
-
204.92M
204.92M
-
193.87M
257.50M
1.81B
279.91M
20.21M
1.41B
670.98M
894.34M
861.70M
213.58M
894.34M
Statement of Cash Flow
Date:
Period:
7.88M
Differed Income Tax :
-
Stock Based Compensation :
11.92M
Change in Working Capital :
- 1041536.00K
Accounts Receivables:
-
Other Working Capital:
4.78B
Other Non-Cash Items:
709.49M
Net Cash Provided by Operating Activities:
62.79M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 536633.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
3.26B
38.82M
3.30B
1.47B
-
-
4.78B
-
-
-
2.48B
-
- 2480659.00K
125.27M
24.40B
29.05B
-
-
-
-
-
-
5.55B
-
5.55B
32.56B
27.01B
86.92M
2.91B
- 39514.0K
1.34B
March 31, 2022 at 6:00:00 AM
387.38M
4.30B
31.31B
2.52B
5.55B
2.3B
1.15B
- 1605531.00K
- 988867.00K
-
-
- 169322.00K
- 30493.00K
31.11M
- 168710.00K
-
- 1094789.00K
3.45B
4.55B
62.79M
-
62.79M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
SLM
2023
2024
2025
2026
2027
$15.92
$24.32
$26.25
$28.33
$30.57