It has been about a month since the last earnings report for Navient (NAVI). Shares have added about 4.1% 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? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Navient Corporation before we dive into how investors and analysts have reacted as of late.
Navient Q3 Earnings Beat on NII Growth & Lower Expenses, Provisions Up
Navient reported third-quarter 2025 adjusted earnings per share of 29 cents, surpassing the Zacks Consensus Estimate of 18 cents. It reported earnings of 28 cents in the prior-year quarter.
Results benefited from an improvement in NII and lower expenses. However, a decrease in other income, along with higher provision for loan losses, acted as a spoilsport.
Results included a $1.17 per share impact from higher provisions for loan losses driven by elevated delinquency balances, the forecasted macroeconomic outlook and the extension of the FFELP portfolio. Additionally, there was a net benefit of eight cents per share to net interest income from lower prepayment rate assumptions, and regulatory and restructuring-related expenses of four cents per share. After considering these, GAAP net loss was $86 million compared with a net loss of $2 million in the prior-year quarter.
NII Rise & Expenses Decline
NII rose 4.2% year over year to $146 million in the third quarter. It surpassed the Zacks Consensus Estimate by 2.8%.
Total other income decreased 92.6% year over year to $23 million.
Provision for loan losses was $168 million, up from $42 million in the prior-year quarter.
Total expenses decreased 67.8% year over year to $110 million.
Quarterly Performance of Segments
Federal Education Loans: The segment generated a net income of $35 million, which rose 29.6% year over year.
As of Sept. 30, 2025, the company’s net FFELP loans were $28.9 billion, down 8.1% sequentially.
Consumer Lending: This segment reported a net loss of $76 million against a net profit of $27 million in the year-ago quarter.
The private education loan delinquency rate greater than 30 days was 6.1% compared with 5.3% in the prior-year quarter.
As of Sept. 30, 2025, the company’s private education loans were $15.4 billion, which decreased 3.4% from the prior quarter. Navient originated $528 million of private education refinance loans in the reported quarter.
Business Processing: The company no longer provides Business Processing segment services after the sale of the government services business in February 2025.
Liquidity
To 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, the company had $571 million of total unrestricted cash and liquid investments as of Sept. 30, 2025.
Capital Distribution Activities
In the third quarter, the company paid $16 million in common stock dividends.
In the reported quarter, Navient repurchased shares of common stock for $26 million. As of Sept. 30, 2025, the company also authorized a new $100 million share-repurchase program, in addition to approximately $26 million remaining under the prior authorization.
2025 Outlook
Core EPS is now expected to be in the range of $0.95–$1.05 compared with the earlier expected range of $1.00–$1.20.
FFELP segment NIM is now expected to be in the range of 55–65 basis points (bps) compared with the previous guidance of 45–60 basis points (bps). This was driven by a stable rate environment and historically low prepayment activity.
The Consumer Lending segment NIM is now projected to be in the range of 255-265 bps compared with the earlier expected range of 270-280 bps.
Management expects the FFELP portfolio balance to total nearly $27 billion at the end of 2025.
Management now expects full-year loan originations to be between $1.8 billion and $2.2 billion, compared to a previous expectation of 30% growth.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -10.54% due to these changes.
VGM Scores
At this time, Navient has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.
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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Navient has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Navient belongs to the Zacks Financial - Consumer Loans industry. Another stock from the same industry, Ally Financial (ALLY), has gained 5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Ally Financial reported revenues of $2.17 billion in the last reported quarter, representing a year-over-year change of +3.1%. EPS of $1.15 for the same period compares with $0.95 a year ago.
Ally Financial is expected to post earnings of $1.01 per share for the current quarter, representing a year-over-year change of +29.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Ally Financial. Also, the stock has a VGM Score of C.
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Navient Corporation (NAVI): Free Stock Analysis Report Ally Financial Inc. (ALLY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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