Intrinsic value of Navient - NAVI

Previous Close

$14.95

  Intrinsic Value

$3.08

stock screener

  Rating & Target

str. sell

-79%

  Value-price divergence*

0%

Previous close

$14.95

 
Intrinsic value

$3.08

 
Up/down potential

-79%

 
Rating

str. sell

 
Value-price divergence*

0%

Our model is not good at valuating stocks of financial companies, such as NAVI.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of NAVI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -3.47
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  4,146
  4,229
  4,326
  4,437
  4,562
  4,701
  4,852
  5,018
  5,196
  5,389
  5,596
  5,817
  6,053
  6,305
  6,572
  6,855
  7,156
  7,474
  7,810
  8,165
  8,541
  8,936
  9,354
  9,794
  10,258
  10,746
  11,260
  11,801
  12,371
  12,970
  13,600
Variable operating expenses, $m
 
  2,673
  2,734
  2,804
  2,883
  2,971
  3,067
  3,171
  3,284
  3,406
  3,537
  3,676
  3,826
  3,985
  4,153
  4,333
  4,522
  4,723
  4,936
  5,161
  5,398
  5,648
  5,912
  6,190
  6,483
  6,791
  7,116
  7,458
  7,818
  8,197
  8,595
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,038
  2,673
  2,734
  2,804
  2,883
  2,971
  3,067
  3,171
  3,284
  3,406
  3,537
  3,676
  3,826
  3,985
  4,153
  4,333
  4,522
  4,723
  4,936
  5,161
  5,398
  5,648
  5,912
  6,190
  6,483
  6,791
  7,116
  7,458
  7,818
  8,197
  8,595
Operating income, $m
  1,108
  1,556
  1,592
  1,633
  1,679
  1,730
  1,786
  1,846
  1,912
  1,983
  2,059
  2,141
  2,228
  2,320
  2,418
  2,523
  2,633
  2,750
  2,874
  3,005
  3,143
  3,289
  3,442
  3,604
  3,775
  3,955
  4,144
  4,343
  4,552
  4,773
  5,005
EBITDA, $m
  1,108
  1,626
  1,664
  1,707
  1,755
  1,808
  1,866
  1,930
  1,999
  2,073
  2,152
  2,237
  2,328
  2,425
  2,528
  2,637
  2,752
  2,874
  3,004
  3,140
  3,285
  3,437
  3,598
  3,767
  3,945
  4,133
  4,331
  4,539
  4,758
  4,988
  5,231
Interest expense (income), $m
  2,301
  4,015
  3,822
  3,912
  4,015
  4,131
  4,259
  4,400
  4,553
  4,719
  4,897
  5,089
  5,294
  5,512
  5,745
  5,993
  6,256
  6,534
  6,828
  7,140
  7,469
  7,817
  8,184
  8,570
  8,978
  9,408
  9,860
  10,336
  10,838
  11,365
  11,920
Earnings before tax, $m
  1,108
  -2,458
  -2,230
  -2,279
  -2,336
  -2,401
  -2,474
  -2,553
  -2,641
  -2,735
  -2,838
  -2,948
  -3,066
  -3,192
  -3,327
  -3,470
  -3,622
  -3,784
  -3,954
  -4,135
  -4,326
  -4,528
  -4,741
  -4,966
  -5,203
  -5,453
  -5,716
  -5,994
  -6,285
  -6,593
  -6,916
Tax expense, $m
  427
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  681
  -2,458
  -2,230
  -2,279
  -2,336
  -2,401
  -2,474
  -2,553
  -2,641
  -2,735
  -2,838
  -2,948
  -3,066
  -3,192
  -3,327
  -3,470
  -3,622
  -3,784
  -3,954
  -4,135
  -4,326
  -4,528
  -4,741
  -4,966
  -5,203
  -5,453
  -5,716
  -5,994
  -6,285
  -6,593
  -6,916

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,253
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  121,136
  124,380
  127,241
  130,511
  134,182
  138,250
  142,714
  147,574
  152,835
  158,503
  164,586
  171,094
  178,038
  185,431
  193,289
  201,626
  210,462
  219,816
  229,707
  240,158
  251,192
  262,836
  275,115
  288,058
  301,695
  316,057
  331,180
  347,097
  363,846
  381,467
  400,001
Adjusted assets (=assets-cash), $m
  119,883
  124,380
  127,241
  130,511
  134,182
  138,250
  142,714
  147,574
  152,835
  158,503
  164,586
  171,094
  178,038
  185,431
  193,289
  201,626
  210,462
  219,816
  229,707
  240,158
  251,192
  262,836
  275,115
  288,058
  301,695
  316,057
  331,180
  347,097
  363,846
  381,467
  400,001
Revenue / Adjusted assets
  0.035
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
  0.034
Average production assets, $m
  688
  702
  718
  737
  757
  780
  805
  833
  863
  895
  929
  966
  1,005
  1,047
  1,091
  1,138
  1,188
  1,241
  1,296
  1,355
  1,418
  1,483
  1,553
  1,626
  1,703
  1,784
  1,869
  1,959
  2,054
  2,153
  2,258
Working capital, $m
  0
  1,104
  1,129
  1,158
  1,191
  1,227
  1,266
  1,310
  1,356
  1,407
  1,461
  1,518
  1,580
  1,646
  1,715
  1,789
  1,868
  1,951
  2,038
  2,131
  2,229
  2,332
  2,441
  2,556
  2,677
  2,805
  2,939
  3,080
  3,229
  3,385
  3,550
Total debt, $m
  114,702
  109,207
  111,782
  114,725
  118,029
  121,690
  125,707
  130,082
  134,817
  139,918
  145,392
  151,249
  157,499
  164,153
  171,225
  178,729
  186,681
  195,099
  204,001
  213,407
  223,338
  233,817
  244,868
  256,517
  268,790
  281,717
  295,327
  309,652
  324,726
  340,585
  357,266
Total liabilities, $m
  117,437
  111,942
  114,517
  117,460
  120,764
  124,425
  128,442
  132,817
  137,552
  142,653
  148,127
  153,984
  160,234
  166,888
  173,960
  181,464
  189,416
  197,834
  206,736
  216,142
  226,073
  236,552
  247,603
  259,252
  271,525
  284,452
  298,062
  312,387
  327,461
  343,320
  360,001
Total equity, $m
  3,699
  12,438
  12,724
  13,051
  13,418
  13,825
  14,271
  14,757
  15,284
  15,850
  16,459
  17,109
  17,804
  18,543
  19,329
  20,163
  21,046
  21,982
  22,971
  24,016
  25,119
  26,284
  27,511
  28,806
  30,169
  31,606
  33,118
  34,710
  36,385
  38,147
  40,000
Total liabilities and equity, $m
  121,136
  124,380
  127,241
  130,511
  134,182
  138,250
  142,713
  147,574
  152,836
  158,503
  164,586
  171,093
  178,038
  185,431
  193,289
  201,627
  210,462
  219,816
  229,707
  240,158
  251,192
  262,836
  275,114
  288,058
  301,694
  316,058
  331,180
  347,097
  363,846
  381,467
  400,001
Debt-to-equity ratio
  31.009
  8.780
  8.790
  8.790
  8.800
  8.800
  8.810
  8.810
  8.820
  8.830
  8.830
  8.840
  8.850
  8.850
  8.860
  8.860
  8.870
  8.880
  8.880
  8.890
  8.890
  8.900
  8.900
  8.910
  8.910
  8.910
  8.920
  8.920
  8.920
  8.930
  8.930
Adjusted equity ratio
  0.031
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  681
  -2,458
  -2,230
  -2,279
  -2,336
  -2,401
  -2,474
  -2,553
  -2,641
  -2,735
  -2,838
  -2,948
  -3,066
  -3,192
  -3,327
  -3,470
  -3,622
  -3,784
  -3,954
  -4,135
  -4,326
  -4,528
  -4,741
  -4,966
  -5,203
  -5,453
  -5,716
  -5,994
  -6,285
  -6,593
  -6,916
Depreciation, amort., depletion, $m
  0
  70
  72
  74
  76
  78
  81
  83
  86
  89
  93
  97
  100
  105
  109
  114
  119
  124
  130
  136
  142
  148
  155
  163
  170
  178
  187
  196
  205
  215
  226
Funds from operations, $m
  1,871
  -2,388
  -2,158
  -2,206
  -2,261
  -2,323
  -2,393
  -2,470
  -2,554
  -2,646
  -2,745
  -2,851
  -2,966
  -3,088
  -3,218
  -3,356
  -3,503
  -3,659
  -3,825
  -4,000
  -4,185
  -4,380
  -4,586
  -4,804
  -5,033
  -5,275
  -5,529
  -5,798
  -6,080
  -6,377
  -6,690
Change in working capital, $m
  514
  22
  25
  29
  33
  36
  40
  43
  47
  50
  54
  58
  62
  66
  70
  74
  78
  83
  88
  93
  98
  103
  109
  115
  121
  127
  134
  141
  149
  156
  164
Cash from operations, $m
  1,357
  -2,410
  -2,184
  -2,235
  -2,293
  -2,359
  -2,433
  -2,513
  -2,601
  -2,696
  -2,799
  -2,909
  -3,027
  -3,153
  -3,288
  -3,430
  -3,582
  -3,742
  -3,913
  -4,092
  -4,282
  -4,483
  -4,695
  -4,918
  -5,154
  -5,402
  -5,664
  -5,939
  -6,229
  -6,534
  -6,854
Maintenance CAPEX, $m
  0
  -69
  -70
  -72
  -74
  -76
  -78
  -81
  -83
  -86
  -89
  -93
  -97
  -100
  -105
  -109
  -114
  -119
  -124
  -130
  -136
  -142
  -148
  -155
  -163
  -170
  -178
  -187
  -196
  -205
  -215
New CAPEX, $m
  0
  -15
  -16
  -18
  -21
  -23
  -25
  -27
  -30
  -32
  -34
  -37
  -39
  -42
  -44
  -47
  -50
  -53
  -56
  -59
  -62
  -66
  -69
  -73
  -77
  -81
  -85
  -90
  -95
  -99
  -105
Cash from investing activities, $m
  11,411
  -84
  -86
  -90
  -95
  -99
  -103
  -108
  -113
  -118
  -123
  -130
  -136
  -142
  -149
  -156
  -164
  -172
  -180
  -189
  -198
  -208
  -217
  -228
  -240
  -251
  -263
  -277
  -291
  -304
  -320
Free cash flow, $m
  12,768
  -2,493
  -2,270
  -2,325
  -2,388
  -2,458
  -2,536
  -2,621
  -2,714
  -2,814
  -2,923
  -3,039
  -3,163
  -3,296
  -3,437
  -3,586
  -3,745
  -3,914
  -4,092
  -4,281
  -4,480
  -4,691
  -4,913
  -5,147
  -5,394
  -5,654
  -5,927
  -6,216
  -6,519
  -6,838
  -7,174
Issuance/(repayment) of debt, $m
  -11,909
  -5,495
  2,575
  2,943
  3,304
  3,661
  4,017
  4,374
  4,735
  5,101
  5,475
  5,857
  6,250
  6,654
  7,072
  7,504
  7,952
  8,418
  8,902
  9,406
  9,931
  10,479
  11,051
  11,649
  12,273
  12,926
  13,610
  14,325
  15,074
  15,859
  16,681
Issuance/(repurchase) of shares, $m
  -755
  11,197
  2,516
  2,606
  2,704
  2,808
  2,920
  3,039
  3,167
  3,302
  3,446
  3,599
  3,761
  3,932
  4,113
  4,304
  4,506
  4,719
  4,943
  5,180
  5,430
  5,693
  5,969
  6,261
  6,567
  6,889
  7,229
  7,585
  7,960
  8,355
  8,769
Cash from financing (excl. dividends), $m  
  -12,908
  5,702
  5,091
  5,549
  6,008
  6,469
  6,937
  7,413
  7,902
  8,403
  8,921
  9,456
  10,011
  10,586
  11,185
  11,808
  12,458
  13,137
  13,845
  14,586
  15,361
  16,172
  17,020
  17,910
  18,840
  19,815
  20,839
  21,910
  23,034
  24,214
  25,450
Total cash flow (excl. dividends), $m
  -140
  3,209
  2,821
  3,224
  3,620
  4,011
  4,401
  4,793
  5,188
  5,589
  5,998
  6,417
  6,847
  7,290
  7,748
  8,222
  8,713
  9,223
  9,753
  10,305
  10,881
  11,481
  12,108
  12,762
  13,447
  14,162
  14,911
  15,695
  16,516
  17,375
  18,276
Retained Cash Flow (-), $m
  210
  -11,197
  -2,516
  -2,606
  -2,704
  -2,808
  -2,920
  -3,039
  -3,167
  -3,302
  -3,446
  -3,599
  -3,761
  -3,932
  -4,113
  -4,304
  -4,506
  -4,719
  -4,943
  -5,180
  -5,430
  -5,693
  -5,969
  -6,261
  -6,567
  -6,889
  -7,229
  -7,585
  -7,960
  -8,355
  -8,769
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -7,988
  305
  618
  916
  1,203
  1,481
  1,753
  2,021
  2,287
  2,552
  2,818
  3,087
  3,359
  3,635
  3,918
  4,207
  4,504
  4,810
  5,125
  5,451
  5,788
  6,138
  6,502
  6,880
  7,273
  7,683
  8,110
  8,555
  9,021
  9,507
Discount rate, %
 
  15.40
  16.17
  16.98
  17.83
  18.72
  19.65
  20.64
  21.67
  22.75
  23.89
  25.08
  26.34
  27.66
  29.04
  30.49
  32.02
  33.62
  35.30
  37.06
  38.92
  40.86
  42.90
  45.05
  47.30
  49.67
  52.15
  54.76
  57.50
  60.37
  63.39
PV of cash for distribution, $m
 
  -6,922
  226
  386
  475
  510
  505
  471
  421
  361
  300
  240
  187
  140
  102
  72
  49
  33
  21
  13
  8
  4
  2
  1
  1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  28.6
  24.5
  21.0
  17.9
  15.3
  13.0
  11.1
  9.4
  8.0
  6.8
  5.7
  4.8
  4.1
  3.5
  2.9
  2.5
  2.1
  1.8
  1.5
  1.3
  1.1
  0.9
  0.7
  0.6
  0.5
  0.4
  0.4
  0.3
  0.3
  0.2

Navient Corporation provides financial products and services in the United States. The company operates in three segments: Federal Family Education Loan Program (FFELP) Loans, Private Education Loans, and Business Services. It holds the portfolio of education loans insured or guaranteed under the FFELP, as well as the portfolio of private education loans. The company also provides asset recovery services for loans and receivables on behalf of guarantors of FFELP loans, and higher education institutions, as well as federal, state, court, and municipal clients; and business processing services on behalf of municipalities, public authorities, and hospitals. Navient Corporation is headquartered in Wilmington, Delaware.

FINANCIAL RATIOS  of  Navient (NAVI)

Valuation Ratios
P/E Ratio 6.4
Price to Sales 1
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 3.2
Price to Free Cash Flow 3.2
Growth Rates
Sales Growth Rate -3.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 1
Current Ratio NaN
LT Debt to Equity 3037.8%
Total Debt to Equity 3100.9%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.6%
Ret/ On Assets - 3 Yr. Avg. 1.6%
Return On Total Capital 0.5%
Ret/ On T. Cap. - 3 Yr. Avg. 0.7%
Return On Equity 17.9%
Return On Equity - 3 Yr. Avg. 21.8%
Asset Turnover 0
Profitability Ratios
Gross Margin 41.1%
Gross Margin - 3 Yr. Avg. 49.7%
EBITDA Margin 82.2%
EBITDA Margin - 3 Yr. Avg. 81.8%
Operating Margin 26.7%
Oper. Margin - 3 Yr. Avg. 34%
Pre-Tax Margin 26.7%
Pre-Tax Margin - 3 Yr. Avg. 34%
Net Profit Margin 16.4%
Net Profit Margin - 3 Yr. Avg. 21.1%
Effective Tax Rate 38.5%
Eff/ Tax Rate - 3 Yr. Avg. 37.9%
Payout Ratio 29.5%

NAVI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NAVI stock intrinsic value calculation we used $4146 million for the last fiscal year's total revenue generated by Navient. The default revenue input number comes from 2016 income statement of Navient. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NAVI stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 15.4%, whose default value for NAVI is calculated based on our internal credit rating of Navient, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Navient.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NAVI stock the variable cost ratio is equal to 63.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NAVI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Navient.

Corporate tax rate of 27% is the nominal tax rate for Navient. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NAVI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NAVI are equal to 16.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Navient operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NAVI is equal to 26.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3699 million for Navient - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 299.87 million for Navient is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Navient at the current share price and the inputted number of shares is $4.5 billion.

RELATED COMPANIES Price Int.Val. Rating
NNI Nelnet Cl A 48.44 12.88  str.sell
SLM SLM 10.85 3.11  str.sell
NSM Nationstar Mor 18.14 206.42  str.buy

COMPANY NEWS

▶ Navient tops Street 2Q forecasts   [Jul-18-17 09:32PM  Associated Press]
▶ Sallie Mae plans to add 285 jobs in Delaware   [Jul-17-17 03:05PM  American City Business Journals]
▶ Student loan servicer fights back as states eye protections   [Jun-20-17 09:23PM  Associated Press]
▶ Navient announces executive appointments   [Jun-19-17 04:15PM  GlobeNewswire]
▶ ETFs with exposure to Navient Corp. : June 15, 2017   [Jun-15-17 02:43PM  Capital Cube]
▶ Feds point fingers as 'debt relief' cos. prey on students   [Jun-14-17 11:17AM  Associated Press]
▶ Navient CEO delivers remarks at annual shareholder meeting   [May-25-17 11:05AM  GlobeNewswire]
▶ ETFs with exposure to Navient Corp. : May 15, 2017   [May-15-17 04:11PM  Capital Cube]
▶ Wilmington employee Jaimie Phipps earns company award   [May-10-17 09:00AM  GlobeNewswire]
▶ Bullish and Bearish Reversals for This Week   [01:00PM  TheStreet.com]
▶ Energy, biotech, financials & more in the trader blitz   [Apr-19-17 04:45PM  CNBC Videos]
▶ Navient to buy big bank's $6.9B student loan portfolio   [09:00AM  American City Business Journals]
▶ Navient misses Street 1Q forecasts   [Apr-18-17 04:48PM  Associated Press]
▶ Navient declares second quarter common stock dividend   [Apr-05-17 09:00AM  GlobeNewswire]
▶ Navient appoints David Yowan to Board of Directors   [Apr-04-17 04:46PM  GlobeNewswire]
▶ Hacienda Hedges and Unicorn Votes   [09:30AM  Bloomberg]
▶ Nation's largest student loan manager hires new CFO   [Feb-22-17 03:05PM  at bizjournals.com]
Stock chart of NAVI Financial statements of NAVI Annual reports of NAVI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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