Navient Gears Up for Q4 Earnings: What's in Store for the Stock?

Navient Corporation NAVI is scheduled to report fourth-quarter 2025 results on Jan. 28, before the opening bell. Its quarterly revenues are expected to have declined, while earnings are expected to have increased on a year-over-year basis.

In the third quarter, NAVI’s results benefited from an increase in net interest income (NII) and lower expenses. However, a decrease in other income, along with higher provision for loan losses, acted as a tailwind.

NAVI has an impressive earnings surprise history. Its earnings outpaced estimates in the trailing three quarters and missed once, with the average earnings surprise being 27.82%.

Navient Corporation Price and EPS Surprise

Navient Corporation price-eps-surprise | Navient Corporation Quote

The Zacks Consensus Estimate for 2025 earnings is pegged at 31 cents per share, which has remained unchanged in the past week. The figure indicates a 24% rise from the year-ago reported figure.

The consensus estimate for sales is pegged at $133.3 million, which suggests a marginal decline from the year-ago reported figure.

Factors to Influence Navient’s Results in Q4

Revenues: Per the Fed’s latest data, consumer loan demand remained resilient in the fourth quarter. As such, Navient’s Consumer Lending segment is expected to have recorded a decent rise in revenues. However, the Federal Education Loans segment revenue is likely under pressure due to lower prepayment levels and subdued originations.

The Zacks Consensus Estimate for NII (Core) is pegged at $133.35 million, indicating a sequential decline of 8.6%. The consensus estimate for NII (Federal Education loan) is pegged at $45.3 million, suggesting a 30.3% decline on a sequential basis. The Zacks Consensus Estimate for NII (consumer lending) is pegged at $104.4 million, implying a sequential rise of 6.5%.

The consensus estimate for servicing revenues is pegged at $12.5 million, indicating a 3.4% fall from the prior quarter.

The Zacks Consensus Estimate for total non-interest income of $20.4 million indicates a 11.3% decline sequentially.

Expenses: Navient’s ongoing cost-control initiatives are expected to have supported operating efficiency and reduced expenses in the fourth quarter. The company’s strategic actions under its phased transformation plan, including the sale of its Government Services and Healthcare Services businesses, significant workforce reduction, outsourcing of servicing operations to MOHELA and efforts to streamline its organizational structure, are likely to have contributed to a further decline in operating expenses in the to-be-reported quarter.

What the Zacks Model Reveals for Navient

Our proven model does not conclusively predict an earnings beat for NAVI this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Navient is -6.90%.

Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

NAVI’s 2025 Outlook

The company expects core earnings per share (EPS) to be in the range of $0.95–$1.05.

NAVI projects the FFELP segment net interest margin (NIM) to be between 55 and 65 basis points (bps), driven by a stable rate environment and historically low prepayment activity.

The Consumer Lending segment NIM is anticipated to be in the range of 255–265 bps.

Management expects the FFELP portfolio balance to total nearly $27 billion by the end of 2025.

Further, full-year loan originations are expected to be between $1.8 billion and $2.2 billion.

Performance of NAVI’s Peer

Ally Financial’s ALLY fourth-quarter 2025 adjusted earnings of $1.09 per share surpassed the Zacks Consensus Estimate of $1.01. The bottom line reflected a 39.7% jump from the year-ago quarter.

Results primarily benefited from a rise in net finance revenues and other revenues. Also, lower provisions and a decline in expenses were tailwinds for ALLY. An increase in loan balances further supported the results to some extent.

Citizens Financial Group CFG reported fourth-quarter 2025 EPS of $1.13, which surpassed the Zacks Consensus Estimate of $1.11 per share. The metric rose 32.9% from the year-ago quarter.

The results of CFG benefited from a rise in non-interest income and NII. The increase in loan and deposit balances was also encouraging. However, a rise in expenses was a major headwind.

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This article originally published on Zacks Investment Research (zacks.com).

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