Intrinsic value of SLM - SLM

Previous Close

$10.95

  Intrinsic Value

$3.03

stock screener

  Rating & Target

str. sell

-72%

Previous close

$10.95

 
Intrinsic value

$3.03

 
Up/down potential

-72%

 
Rating

str. sell

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

We calculate the intrinsic value of SLM 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 2013), $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 4.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2013(a)
   2014
   2015
   2016
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -1.66
  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
  6,531
  6,662
  6,815
  6,990
  7,187
  7,404
  7,644
  7,904
  8,186
  8,489
  8,815
  9,164
  9,535
  9,931
  10,352
  10,799
  11,272
  11,773
  12,303
  12,863
  13,454
  14,077
  14,735
  15,428
  16,158
  16,928
  17,738
  18,590
  19,487
  20,431
  21,424
Variable operating expenses, $m
 
  4,589
  4,694
  4,813
  4,948
  5,096
  5,260
  5,437
  5,630
  5,837
  6,060
  6,258
  6,512
  6,783
  7,070
  7,375
  7,698
  8,041
  8,402
  8,785
  9,188
  9,614
  10,063
  10,537
  11,036
  11,561
  12,114
  12,696
  13,309
  13,954
  14,632
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
  4,176
  4,589
  4,694
  4,813
  4,948
  5,096
  5,260
  5,437
  5,630
  5,837
  6,060
  6,258
  6,512
  6,783
  7,070
  7,375
  7,698
  8,041
  8,402
  8,785
  9,188
  9,614
  10,063
  10,537
  11,036
  11,561
  12,114
  12,696
  13,309
  13,954
  14,632
Operating income, $m
  2,355
  2,073
  2,121
  2,177
  2,239
  2,308
  2,384
  2,466
  2,556
  2,652
  2,755
  2,905
  3,023
  3,149
  3,282
  3,424
  3,574
  3,732
  3,900
  4,078
  4,265
  4,463
  4,671
  4,891
  5,123
  5,367
  5,623
  5,894
  6,178
  6,477
  6,792
EBITDA, $m
  2,355
  2,116
  2,165
  2,220
  2,283
  2,352
  2,428
  2,511
  2,600
  2,696
  2,800
  2,911
  3,029
  3,155
  3,288
  3,430
  3,580
  3,739
  3,908
  4,086
  4,273
  4,471
  4,680
  4,900
  5,132
  5,377
  5,634
  5,905
  6,190
  6,490
  6,805
Interest expense (income), $m
  2,163
  5,084
  4,875
  4,990
  5,121
  5,269
  5,432
  5,611
  5,807
  6,018
  6,246
  6,490
  6,751
  7,030
  7,327
  7,643
  7,978
  8,333
  8,709
  9,106
  9,526
  9,969
  10,437
  10,930
  11,450
  11,998
  12,574
  13,182
  13,821
  14,494
  15,202
Earnings before tax, $m
  2,087
  -3,011
  -2,754
  -2,813
  -2,882
  -2,961
  -3,048
  -3,145
  -3,251
  -3,366
  -3,490
  -3,585
  -3,728
  -3,882
  -4,045
  -4,219
  -4,404
  -4,600
  -4,808
  -5,028
  -5,260
  -5,506
  -5,765
  -6,039
  -6,327
  -6,631
  -6,951
  -7,288
  -7,643
  -8,017
  -8,410
Tax expense, $m
  776
  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
  1,418
  -3,011
  -2,754
  -2,813
  -2,882
  -2,961
  -3,048
  -3,145
  -3,251
  -3,366
  -3,490
  -3,585
  -3,728
  -3,882
  -4,045
  -4,219
  -4,404
  -4,600
  -4,808
  -5,028
  -5,260
  -5,506
  -5,765
  -6,039
  -6,327
  -6,631
  -6,951
  -7,288
  -7,643
  -8,017
  -8,410

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  5,190
  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
  159,543
  158,610
  162,258
  166,428
  171,110
  176,297
  181,989
  188,187
  194,896
  202,124
  209,881
  218,180
  227,035
  236,463
  246,483
  257,115
  268,383
  280,310
  292,923
  306,250
  320,322
  335,169
  350,828
  367,332
  384,722
  403,038
  422,322
  442,619
  463,978
  486,449
  510,084
Adjusted assets (=assets-cash), $m
  154,353
  158,610
  162,258
  166,428
  171,110
  176,297
  181,989
  188,187
  194,896
  202,124
  209,881
  218,180
  227,035
  236,463
  246,483
  257,115
  268,383
  280,310
  292,923
  306,250
  320,322
  335,169
  350,828
  367,332
  384,722
  403,038
  422,322
  442,619
  463,978
  486,449
  510,084
Revenue / Adjusted assets
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
Average production assets, $m
  42
  40
  41
  42
  43
  44
  46
  47
  49
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  77
  81
  84
  88
  93
  97
  102
  106
  112
  117
  123
  129
Working capital, $m
  0
  3,331
  3,407
  3,495
  3,593
  3,702
  3,822
  3,952
  4,093
  4,245
  4,408
  4,582
  4,768
  4,966
  5,176
  5,399
  5,636
  5,887
  6,151
  6,431
  6,727
  7,039
  7,367
  7,714
  8,079
  8,464
  8,869
  9,295
  9,744
  10,215
  10,712
Total debt, $m
  150,443
  139,286
  142,569
  146,322
  150,536
  155,204
  160,327
  165,905
  171,943
  178,449
  185,430
  192,899
  200,868
  209,353
  218,371
  227,941
  238,081
  248,816
  260,168
  272,162
  284,826
  298,189
  312,282
  327,136
  342,787
  359,271
  376,627
  394,894
  414,117
  434,341
  455,612
Total liabilities, $m
  153,906
  142,749
  146,032
  149,785
  153,999
  158,667
  163,790
  169,368
  175,406
  181,912
  188,893
  196,362
  204,331
  212,816
  221,834
  231,404
  241,544
  252,279
  263,631
  275,625
  288,289
  301,652
  315,745
  330,599
  346,250
  362,734
  380,090
  398,357
  417,580
  437,804
  459,075
Total equity, $m
  5,637
  15,861
  16,226
  16,643
  17,111
  17,630
  18,199
  18,819
  19,490
  20,212
  20,988
  21,818
  22,703
  23,646
  24,648
  25,712
  26,838
  28,031
  29,292
  30,625
  32,032
  33,517
  35,083
  36,733
  38,472
  40,304
  42,232
  44,262
  46,398
  48,645
  51,008
Total liabilities and equity, $m
  159,543
  158,610
  162,258
  166,428
  171,110
  176,297
  181,989
  188,187
  194,896
  202,124
  209,881
  218,180
  227,034
  236,462
  246,482
  257,116
  268,382
  280,310
  292,923
  306,250
  320,321
  335,169
  350,828
  367,332
  384,722
  403,038
  422,322
  442,619
  463,978
  486,449
  510,083
Debt-to-equity ratio
  26.688
  8.780
  8.790
  8.790
  8.800
  8.800
  8.810
  8.820
  8.820
  8.830
  8.840
  8.840
  8.850
  8.850
  8.860
  8.870
  8.870
  8.880
  8.880
  8.890
  8.890
  8.900
  8.900
  8.910
  8.910
  8.910
  8.920
  8.920
  8.930
  8.930
  8.930
Adjusted equity ratio
  0.003
  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
  1,418
  -3,011
  -2,754
  -2,813
  -2,882
  -2,961
  -3,048
  -3,145
  -3,251
  -3,366
  -3,490
  -3,585
  -3,728
  -3,882
  -4,045
  -4,219
  -4,404
  -4,600
  -4,808
  -5,028
  -5,260
  -5,506
  -5,765
  -6,039
  -6,327
  -6,631
  -6,951
  -7,288
  -7,643
  -8,017
  -8,410
Depreciation, amort., depletion, $m
  0
  43
  43
  44
  44
  44
  44
  44
  44
  44
  45
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
Funds from operations, $m
  2,436
  -2,968
  -2,710
  -2,770
  -2,839
  -2,917
  -3,004
  -3,101
  -3,207
  -3,322
  -3,446
  -3,579
  -3,723
  -3,876
  -4,039
  -4,213
  -4,398
  -4,593
  -4,801
  -5,020
  -5,252
  -5,498
  -5,756
  -6,029
  -6,317
  -6,621
  -6,940
  -7,277
  -7,632
  -8,005
  -8,397
Change in working capital, $m
  436
  65
  77
  88
  98
  109
  120
  130
  141
  152
  163
  174
  186
  198
  210
  223
  237
  250
  265
  280
  295
  312
  329
  347
  365
  385
  405
  426
  449
  472
  496
Cash from operations, $m
  2,000
  -3,033
  -2,787
  -2,857
  -2,937
  -3,026
  -3,124
  -3,231
  -3,348
  -3,473
  -3,609
  -3,754
  -3,909
  -4,074
  -4,250
  -4,436
  -4,634
  -4,844
  -5,066
  -5,300
  -5,548
  -5,809
  -6,085
  -6,376
  -6,683
  -7,005
  -7,345
  -7,703
  -8,080
  -8,476
  -8,893
Maintenance CAPEX, $m
  0
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
New CAPEX, $m
  0
  2
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
Cash from investing activities, $m
  9,210
  -2
  -5
  -5
  -5
  -5
  -5
  -7
  -7
  -7
  -7
  -7
  -7
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -12
  -12
  -12
  -13
  -13
  -15
  -15
  -16
  -16
  -18
  -18
Free cash flow, $m
  11,210
  -3,036
  -2,792
  -2,862
  -2,942
  -3,031
  -3,130
  -3,237
  -3,354
  -3,480
  -3,616
  -3,761
  -3,916
  -4,082
  -4,258
  -4,445
  -4,643
  -4,854
  -5,076
  -5,311
  -5,559
  -5,821
  -6,098
  -6,389
  -6,696
  -7,020
  -7,360
  -7,719
  -8,097
  -8,494
  -8,912
Issuance/(repayment) of debt, $m
  -12,532
  -5,967
  3,283
  3,753
  4,213
  4,669
  5,123
  5,578
  6,038
  6,505
  6,981
  7,469
  7,969
  8,485
  9,018
  9,569
  10,141
  10,734
  11,352
  11,994
  12,664
  13,363
  14,092
  14,854
  15,651
  16,484
  17,355
  18,268
  19,223
  20,223
  21,272
Issuance/(repurchase) of shares, $m
  -600
  13,235
  3,119
  3,230
  3,350
  3,479
  3,617
  3,765
  3,922
  4,089
  4,266
  4,415
  4,614
  4,825
  5,047
  5,283
  5,531
  5,793
  6,069
  6,361
  6,668
  6,991
  7,331
  7,689
  8,066
  8,462
  8,880
  9,318
  9,779
  10,264
  10,773
Cash from financing (excl. dividends), $m  
  -9,636
  7,268
  6,402
  6,983
  7,563
  8,148
  8,740
  9,343
  9,960
  10,594
  11,247
  11,884
  12,583
  13,310
  14,065
  14,852
  15,672
  16,527
  17,421
  18,355
  19,332
  20,354
  21,423
  22,543
  23,717
  24,946
  26,235
  27,586
  29,002
  30,487
  32,045
Total cash flow (excl. dividends), $m
  1,574
  4,232
  3,610
  4,121
  4,622
  5,117
  5,610
  6,106
  6,606
  7,114
  7,632
  8,122
  8,667
  9,228
  9,807
  10,407
  11,028
  11,674
  12,345
  13,044
  13,773
  14,533
  15,326
  16,155
  17,021
  17,927
  18,875
  19,867
  20,905
  21,993
  23,133
Retained Cash Flow (-), $m
  -577
  -13,235
  -3,119
  -3,230
  -3,350
  -3,479
  -3,617
  -3,765
  -3,922
  -4,089
  -4,266
  -4,415
  -4,614
  -4,825
  -5,047
  -5,283
  -5,531
  -5,793
  -6,069
  -6,361
  -6,668
  -6,991
  -7,331
  -7,689
  -8,066
  -8,462
  -8,880
  -9,318
  -9,779
  -10,264
  -10,773
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
 
  -9,003
  491
  891
  1,271
  1,637
  1,993
  2,341
  2,684
  3,025
  3,366
  3,708
  4,053
  4,403
  4,760
  5,124
  5,497
  5,881
  6,276
  6,684
  7,105
  7,542
  7,995
  8,465
  8,955
  9,464
  9,995
  10,549
  11,126
  11,730
  12,360
Discount rate, %
 
  14.90
  15.65
  16.43
  17.25
  18.11
  19.02
  19.97
  20.97
  22.01
  23.11
  24.27
  25.48
  26.76
  28.10
  29.50
  30.98
  32.52
  34.15
  35.86
  37.65
  39.53
  41.51
  43.59
  45.77
  48.05
  50.46
  52.98
  55.63
  58.41
  61.33
PV of cash for distribution, $m
 
  -7,835
  367
  564
  673
  712
  701
  655
  585
  505
  421
  340
  266
  202
  149
  106
  73
  49
  32
  20
  12
  7
  4
  2
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  26.3
  21.3
  17.2
  13.9
  11.2
  9.0
  7.2
  5.8
  4.6
  3.7
  3.0
  2.4
  1.9
  1.5
  1.2
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0

SLM Corporation is a holding company. The Company's primary business is to originate and service loans it makes to students and their families to finance the cost of their education. The Company is a saving, planning and paying for college company. It is engaged in originating and servicing Private Education Loans it makes to students and their families. It uses Private Education Loans to mean education loans to students or their families that are not made, insured or guaranteed by any state or federal government. It also operates Upromise, Inc., a consumer savings network that provides financial rewards on everyday purchases to help families save for college. Its Private Education Loans that it owns or services are originated and funded by its subsidiary, Sallie Mae Bank (the Bank). Its services include resources dedicated to assist customers with needs and escalated inquiries. It provides access to a free online scholarship database, which includes information about scholarships. _tck('aft');

FINANCIAL RATIOS  of  SLM (SLM)

Valuation Ratios
P/E Ratio 3.3
Price to Sales 0.7
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 2.3
Price to Free Cash Flow 2.3
Growth Rates
Sales Growth Rate -1.7%
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 0
Current Ratio NaN
LT Debt to Equity 2424.1%
Total Debt to Equity 2668.8%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.6%
Ret/ On Assets - 3 Yr. Avg. 1.4%
Return On Total Capital 0.9%
Ret/ On T. Cap. - 3 Yr. Avg. 0.6%
Return On Equity 26.5%
Return On Equity - 3 Yr. Avg. 19%
Asset Turnover 0
Profitability Ratios
Gross Margin 66.2%
Gross Margin - 3 Yr. Avg. 63.8%
EBITDA Margin 65.1%
EBITDA Margin - 3 Yr. Avg. 58.4%
Operating Margin 36.1%
Oper. Margin - 3 Yr. Avg. 31.9%
Pre-Tax Margin 32%
Pre-Tax Margin - 3 Yr. Avg. 22.5%
Net Profit Margin 21.7%
Net Profit Margin - 3 Yr. Avg. 15.1%
Effective Tax Rate 37.2%
Eff/ Tax Rate - 3 Yr. Avg. 35.8%
Payout Ratio 20%

SLM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SLM stock intrinsic value calculation we used $6531 million for the last fiscal year's total revenue generated by SLM. The default revenue input number comes from 2013 income statement of SLM. 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 SLM 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 14.9%, whose default value for SLM is calculated based on our internal credit rating of SLM, 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 SLM.
    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 SLM stock the variable cost ratio is equal to 68.9%.

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 SLM 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 SLM.

Corporate tax rate of 27% is the nominal tax rate for SLM. 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 SLM 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 SLM are equal to 0.6%.

Life of production assets of 10 years is the average useful life of capital assets used in SLM 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 SLM is equal to 50%. 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 - $5637 million for SLM - 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 431.963 million for SLM 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 SLM at the current share price and the inputted number of shares is $4.7 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ ETFs with exposure to SLM Corp. : October 23, 2017   [Oct-23-17 11:04AM  Capital Cube]
▶ Sallie Mae meets 3Q profit forecasts   [Oct-18-17 04:45PM  Associated Press]
▶ SLM Stock Rises 1% Monday, Up 7% in Last 30 Days   [Sep-20-17 10:53AM  GuruFocus.com]
▶ ETFs with exposure to SLM Corp. : August 4, 2017   [Aug-03-17 09:26PM  Capital Cube]
▶ Sallie Mae meets 2Q profit forecasts   [Jul-19-17 09:48PM  Associated Press]
▶ Sallie Mae plans to add 285 jobs in Delaware   [Jul-17-17 03:05PM  American City Business Journals]
▶ Sallie Mae Declares Preferred Stock Series B Dividend   [Jun-22-17 04:30PM  Business Wire]
▶ Sallie Mae Honored with Multiple American Business Awards   [Jun-14-17 02:07PM  Business Wire]
▶ Sallie Mae Wins Multiple Hermes Creative Awards   [May-17-17 01:57PM  Business Wire]
▶ Sallie Mae Adds New Features to Award-Winning Mobile App   [May-01-17 01:17PM  Business Wire]
▶ Sallie Mae Declares Preferred Stock Series B Dividend   [Apr-27-17 04:30PM  Business Wire]
▶ ETFs with exposure to SLM Corp. : April 26, 2017   [Apr-26-17 03:36PM  Capital Cube]
▶ Sallie Mae Honored for Excellence in Media Relations   [Apr-24-17 02:03PM  Business Wire]
▶ SLM Corp.: Strong price momentum but will it sustain?   [Apr-21-17 01:20PM  Capital Cube]
▶ Why Sallie Mae Stock Jumped 10% Today   [12:13PM  Motley Fool]
▶ Sallie Mae beats Street 1Q forecasts   [Apr-19-17 05:00PM  Associated Press]
Financial statements of SLM
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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