Intrinsic value of SLM - SLM

Previous Close

$10.29

  Intrinsic Value

$3.11

stock screener

  Rating & Target

str. sell

-70%

  Value-price divergence*

0%

Previous close

$10.29

 
Intrinsic value

$3.11

 
Up/down potential

-70%

 
Rating

str. sell

 
Value-price divergence*

0%

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

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

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 4.3

 

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
  5,266
  4,997
  5,115
  5,249
  5,400
  5,568
  5,751
  5,951
  6,168
  6,401
  6,651
  6,919
  7,205
  7,509
  7,832
  8,175
  8,539
  8,924
  9,331
  9,761
  10,215
  10,694
  11,199
  11,732
  12,293
  12,884
  13,506
  14,161
  14,851
  15,576
Earnings before tax, $m
  2,087
  -3,193
  -2,876
  -2,938
  -3,010
  -3,092
  -3,184
  -3,285
  -3,396
  -3,516
  -3,646
  -3,746
  -3,896
  -4,056
  -4,227
  -4,409
  -4,602
  -4,807
  -5,024
  -5,253
  -5,496
  -5,752
  -6,023
  -6,308
  -6,609
  -6,927
  -7,261
  -7,613
  -7,983
  -8,373
  -8,784
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
  -3,193
  -2,876
  -2,938
  -3,010
  -3,092
  -3,184
  -3,285
  -3,396
  -3,516
  -3,646
  -3,746
  -3,896
  -4,056
  -4,227
  -4,409
  -4,602
  -4,807
  -5,024
  -5,253
  -5,496
  -5,752
  -6,023
  -6,308
  -6,609
  -6,927
  -7,261
  -7,613
  -7,983
  -8,373
  -8,784

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
  162,479
  166,216
  170,487
  175,283
  180,597
  186,428
  192,777
  199,650
  207,054
  215,000
  223,501
  232,572
  242,230
  252,494
  263,386
  274,929
  287,147
  300,067
  313,720
  328,134
  343,344
  359,384
  376,292
  394,106
  412,868
  432,622
  453,415
  475,295
  498,313
  522,525
Adjusted assets (=assets-cash), $m
  154,353
  162,479
  166,216
  170,487
  175,283
  180,597
  186,428
  192,777
  199,650
  207,054
  215,000
  223,501
  232,572
  242,230
  252,494
  263,386
  274,929
  287,147
  300,067
  313,720
  328,134
  343,344
  359,384
  376,292
  394,106
  412,868
  432,622
  453,415
  475,295
  498,313
  522,525
Revenue / Adjusted assets
  0.042
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
  0.041
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
  142,768
  146,131
  149,976
  154,292
  159,074
  164,322
  170,036
  176,222
  182,885
  190,037
  197,688
  205,852
  214,544
  223,782
  233,585
  243,973
  254,969
  266,598
  278,885
  291,858
  305,547
  319,983
  335,200
  351,232
  368,118
  385,897
  404,610
  424,302
  445,019
  466,809
Total liabilities, $m
  153,906
  146,231
  149,594
  153,439
  157,755
  162,537
  167,785
  173,499
  179,685
  186,348
  193,500
  201,151
  209,315
  218,007
  227,245
  237,048
  247,436
  258,432
  270,061
  282,348
  295,321
  309,010
  323,446
  338,663
  354,695
  371,581
  389,360
  408,073
  427,765
  448,482
  470,272
Total equity, $m
  5,637
  16,248
  16,622
  17,049
  17,528
  18,060
  18,643
  19,278
  19,965
  20,705
  21,500
  22,350
  23,257
  24,223
  25,249
  26,339
  27,493
  28,715
  30,007
  31,372
  32,813
  34,334
  35,938
  37,629
  39,411
  41,287
  43,262
  45,341
  47,529
  49,831
  52,252
Total liabilities and equity, $m
  159,543
  162,479
  166,216
  170,488
  175,283
  180,597
  186,428
  192,777
  199,650
  207,053
  215,000
  223,501
  232,572
  242,230
  252,494
  263,387
  274,929
  287,147
  300,068
  313,720
  328,134
  343,344
  359,384
  376,292
  394,106
  412,868
  432,622
  453,414
  475,294
  498,313
  522,524
Debt-to-equity ratio
  26.688
  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
  8.870
  8.880
  8.880
  8.890
  8.890
  8.900
  8.900
  8.910
  8.910
  8.920
  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
  -3,193
  -2,876
  -2,938
  -3,010
  -3,092
  -3,184
  -3,285
  -3,396
  -3,516
  -3,646
  -3,746
  -3,896
  -4,056
  -4,227
  -4,409
  -4,602
  -4,807
  -5,024
  -5,253
  -5,496
  -5,752
  -6,023
  -6,308
  -6,609
  -6,927
  -7,261
  -7,613
  -7,983
  -8,373
  -8,784
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
  -3,150
  -2,832
  -2,894
  -2,966
  -3,048
  -3,140
  -3,241
  -3,351
  -3,471
  -3,601
  -3,741
  -3,890
  -4,050
  -4,221
  -4,402
  -4,595
  -4,800
  -5,016
  -5,245
  -5,488
  -5,744
  -6,014
  -6,299
  -6,600
  -6,916
  -7,250
  -7,602
  -7,972
  -8,361
  -8,771
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
  -3,215
  -2,909
  -2,982
  -3,065
  -3,157
  -3,259
  -3,371
  -3,492
  -3,623
  -3,764
  -3,915
  -4,076
  -4,248
  -4,431
  -4,626
  -4,832
  -5,050
  -5,281
  -5,525
  -5,783
  -6,055
  -6,343
  -6,646
  -6,965
  -7,301
  -7,655
  -8,028
  -8,420
  -8,833
  -9,267
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
  -3,217
  -2,914
  -2,987
  -3,070
  -3,163
  -3,265
  -3,377
  -3,499
  -3,630
  -3,771
  -3,922
  -4,084
  -4,256
  -4,440
  -4,634
  -4,841
  -5,060
  -5,291
  -5,536
  -5,794
  -6,067
  -6,355
  -6,659
  -6,978
  -7,315
  -7,670
  -8,044
  -8,437
  -8,850
  -9,285
Issuance/(repayment) of debt, $m
  -12,532
  -7,675
  3,363
  3,845
  4,316
  4,783
  5,248
  5,714
  6,185
  6,664
  7,152
  7,651
  8,164
  8,692
  9,238
  9,803
  10,388
  10,996
  11,629
  12,287
  12,973
  13,689
  14,436
  15,217
  16,033
  16,886
  17,779
  18,713
  19,692
  20,717
  21,790
Issuance/(repurchase) of shares, $m
  -600
  13,804
  3,249
  3,365
  3,490
  3,624
  3,767
  3,920
  4,083
  4,256
  4,440
  4,596
  4,803
  5,022
  5,253
  5,498
  5,756
  6,028
  6,316
  6,618
  6,937
  7,273
  7,627
  7,999
  8,391
  8,803
  9,236
  9,692
  10,171
  10,675
  11,205
Cash from financing (excl. dividends), $m  
  -9,636
  6,129
  6,612
  7,210
  7,806
  8,407
  9,015
  9,634
  10,268
  10,920
  11,592
  12,247
  12,967
  13,714
  14,491
  15,301
  16,144
  17,024
  17,945
  18,905
  19,910
  20,962
  22,063
  23,216
  24,424
  25,689
  27,015
  28,405
  29,863
  31,392
  32,995
Total cash flow (excl. dividends), $m
  1,574
  2,911
  3,699
  4,223
  4,736
  5,243
  5,749
  6,257
  6,770
  7,290
  7,821
  8,325
  8,883
  9,458
  10,052
  10,666
  11,303
  11,965
  12,653
  13,369
  14,116
  14,895
  15,708
  16,557
  17,445
  18,373
  19,345
  20,362
  21,426
  22,542
  23,710
Retained Cash Flow (-), $m
  -577
  -13,804
  -3,249
  -3,365
  -3,490
  -3,624
  -3,767
  -3,920
  -4,083
  -4,256
  -4,440
  -4,596
  -4,803
  -5,022
  -5,253
  -5,498
  -5,756
  -6,028
  -6,316
  -6,618
  -6,937
  -7,273
  -7,627
  -7,999
  -8,391
  -8,803
  -9,236
  -9,692
  -10,171
  -10,675
  -11,205
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
 
  -10,893
  450
  858
  1,246
  1,620
  1,982
  2,337
  2,687
  3,034
  3,381
  3,729
  4,080
  4,436
  4,798
  5,168
  5,547
  5,936
  6,337
  6,751
  7,179
  7,622
  8,081
  8,558
  9,054
  9,571
  10,109
  10,670
  11,255
  11,866
  12,505
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
 
  -9,480
  336
  543
  659
  705
  698
  654
  586
  506
  423
  342
  268
  203
  150
  107
  74
  49
  32
  20
  12
  7
  4
  2
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  23.9
  19.0
  15.0
  11.8
  9.3
  7.3
  5.8
  4.5
  3.5
  2.8
  2.2
  1.7
  1.3
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0

SLM Corporation, together with its subsidiaries, operates as a saving, planning, and paying for education company in the United States. It offers private education loans to students and their families. The company also provides banking products, such as certificates of deposits, money market deposit accounts, and high yield savings accounts; and a consumer savings network that offers financial rewards on everyday purchases to help families save for college. SLM Corporation was founded in 1972 and is headquartered in Newark, Delaware.

FINANCIAL RATIOS  of  SLM (SLM)

Valuation Ratios
P/E Ratio 3.1
Price to Sales 0.7
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 2.2
Price to Free Cash Flow 2.2
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 420.923 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 $4.3 billion.

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COMPANY NEWS

▶ 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]
▶ Sallie Mae Recognized as a Leader in Board Diversity   [Mar-29-17 11:02AM  Business Wire]
▶ Sallie Mae Social Media Director Earns National Recognition   [Mar-22-17 12:23PM  Business Wire]
▶ [$$] Sallie Mae EPS Could Grow 20% a Year   [Jan-31-17 03:08PM  at Barrons.com]
▶ Sallie Mae Ranked Among Best Banks of 2017   [Jan-27-17 11:45AM  Business Wire]
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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