SLM : Cheap Valuation Meets Rising Credit Risk

SLM Corporation (SLM) trades at a low 6.6x P/E, despite strong Q1 2026 results, high ROE, and dominant private student loan market share. Q1 2026 EPS beat at $1.54, with management raising full-year guidance to $3.10–$3.20, supported by a 5.29% net interest margin and aggressive capital returns. Rising overdue loans (3.98% vs. 3.58% YoY) and higher provisions highlight growing credit risk, partially masked by one-time reserve releases from loan sales.