Intrinsic value of SLM - SLM

Previous Close

$11.72

  Intrinsic Value

$5.53

stock screener

  Rating & Target

str. sell

-53%

Previous close

$11.72

 
Intrinsic value

$5.53

 
Up/down potential

-53%

 
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 2017), $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 5.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.50
  16.25
  15.13
  14.11
  13.20
  12.38
  11.64
  10.98
  10.38
  9.84
  9.36
  8.92
  8.53
  8.18
  7.86
  7.57
  7.32
  7.08
  6.88
  6.69
  6.52
  6.37
  6.23
  6.11
  6.00
  5.90
  5.81
  5.73
  5.65
  5.59
Revenue, $m
  1,106
  1,285
  1,480
  1,689
  1,912
  2,148
  2,398
  2,662
  2,938
  3,227
  3,529
  3,844
  4,172
  4,513
  4,868
  5,236
  5,619
  6,018
  6,431
  6,861
  7,309
  7,774
  8,259
  8,763
  9,289
  9,836
  10,408
  11,004
  11,626
  12,276
Variable operating expenses, $m
  496
  577
  664
  758
  858
  965
  1,077
  1,195
  1,319
  1,449
  1,585
  1,726
  1,873
  2,026
  2,186
  2,351
  2,523
  2,702
  2,888
  3,081
  3,282
  3,491
  3,708
  3,935
  4,171
  4,417
  4,673
  4,941
  5,220
  5,512
Fixed operating expenses, $m
  28
  28
  29
  29
  30
  31
  31
  32
  33
  34
  34
  35
  36
  37
  37
  38
  39
  40
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
  51
  52
Total operating expenses, $m
  524
  605
  693
  787
  888
  996
  1,108
  1,227
  1,352
  1,483
  1,619
  1,761
  1,909
  2,063
  2,223
  2,389
  2,562
  2,742
  2,929
  3,123
  3,325
  3,535
  3,753
  3,981
  4,218
  4,465
  4,722
  4,991
  5,271
  5,564
Operating income, $m
  582
  680
  787
  901
  1,023
  1,153
  1,290
  1,434
  1,586
  1,745
  1,910
  2,083
  2,263
  2,450
  2,645
  2,847
  3,057
  3,276
  3,503
  3,739
  3,985
  4,240
  4,506
  4,783
  5,072
  5,372
  5,686
  6,013
  6,355
  6,712
EBITDA, $m
  2,951
  3,435
  3,958
  4,520
  5,119
  5,756
  6,430
  7,138
  7,882
  8,660
  9,473
  10,320
  11,203
  12,121
  13,076
  14,068
  15,100
  16,171
  17,285
  18,443
  19,647
  20,900
  22,204
  23,562
  24,977
  26,452
  27,990
  29,594
  31,269
  33,019
Interest expense (income), $m
  2,163
  1,017
  1,061
  1,204
  1,359
  1,525
  1,703
  1,891
  2,090
  2,300
  2,520
  2,751
  2,991
  3,242
  3,503
  3,775
  4,058
  4,352
  4,657
  4,974
  5,304
  5,646
  6,003
  6,374
  6,760
  7,161
  7,580
  8,017
  8,472
  8,947
  9,442
Earnings before tax, $m
  -435
  -381
  -417
  -458
  -502
  -550
  -601
  -656
  -714
  -776
  -841
  -908
  -979
  -1,053
  -1,131
  -1,211
  -1,294
  -1,381
  -1,471
  -1,565
  -1,662
  -1,763
  -1,868
  -1,977
  -2,090
  -2,208
  -2,331
  -2,458
  -2,591
  -2,730
Tax expense, $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
Net income, $m
  -435
  -381
  -417
  -458
  -502
  -550
  -601
  -656
  -714
  -776
  -841
  -908
  -979
  -1,053
  -1,131
  -1,211
  -1,294
  -1,381
  -1,471
  -1,565
  -1,662
  -1,763
  -1,868
  -1,977
  -2,090
  -2,208
  -2,331
  -2,458
  -2,591
  -2,730

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  18,126
  21,071
  24,258
  27,682
  31,336
  35,216
  39,316
  43,632
  48,162
  52,902
  57,853
  63,015
  68,391
  73,983
  79,798
  85,841
  92,122
  98,648
  105,432
  112,484
  119,817
  127,447
  135,388
  143,657
  152,272
  161,253
  170,617
  180,389
  190,588
  201,240
Adjusted assets (=assets-cash), $m
  18,126
  21,071
  24,258
  27,682
  31,336
  35,216
  39,316
  43,632
  48,162
  52,902
  57,853
  63,015
  68,391
  73,983
  79,798
  85,841
  92,122
  98,648
  105,432
  112,484
  119,817
  127,447
  135,388
  143,657
  152,272
  161,253
  170,617
  180,389
  190,588
  201,240
Revenue / Adjusted assets
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
  0.061
Average production assets, $m
  23,695
  27,545
  31,711
  36,186
  40,963
  46,035
  51,395
  57,038
  62,959
  69,155
  75,627
  82,375
  89,402
  96,713
  104,314
  112,215
  120,424
  128,956
  137,823
  147,042
  156,629
  166,602
  176,983
  187,793
  199,055
  210,794
  223,036
  235,809
  249,142
  263,066
Working capital, $m
  -22,694
  -26,382
  -30,372
  -34,658
  -39,234
  -44,091
  -49,225
  -54,629
  -60,300
  -66,235
  -72,434
  -78,897
  -85,627
  -92,629
  -99,909
  -107,476
  -115,339
  -123,510
  -132,003
  -140,832
  -150,014
  -159,567
  -169,509
  -179,862
  -190,649
  -201,892
  -213,617
  -225,851
  -238,621
  -251,957
Total debt, $m
  19,641
  22,292
  25,160
  28,242
  31,530
  35,022
  38,712
  42,597
  46,674
  50,940
  55,396
  60,042
  64,879
  69,913
  75,146
  80,585
  86,238
  92,111
  98,216
  104,563
  111,163
  118,030
  125,177
  132,619
  140,373
  148,455
  156,884
  165,678
  174,857
  184,444
Total liabilities, $m
  16,313
  18,964
  21,832
  24,914
  28,202
  31,694
  35,384
  39,269
  43,346
  47,612
  52,068
  56,714
  61,552
  66,585
  71,818
  77,257
  82,910
  88,784
  94,888
  101,235
  107,835
  114,702
  121,849
  129,291
  137,045
  145,127
  153,556
  162,350
  171,529
  181,116
Total equity, $m
  1,813
  2,107
  2,426
  2,768
  3,134
  3,522
  3,932
  4,363
  4,816
  5,290
  5,785
  6,302
  6,839
  7,398
  7,980
  8,584
  9,212
  9,865
  10,543
  11,248
  11,982
  12,745
  13,539
  14,366
  15,227
  16,125
  17,062
  18,039
  19,059
  20,124
Total liabilities and equity, $m
  18,126
  21,071
  24,258
  27,682
  31,336
  35,216
  39,316
  43,632
  48,162
  52,902
  57,853
  63,016
  68,391
  73,983
  79,798
  85,841
  92,122
  98,649
  105,431
  112,483
  119,817
  127,447
  135,388
  143,657
  152,272
  161,252
  170,618
  180,389
  190,588
  201,240
Debt-to-equity ratio
  10.840
  10.580
  10.370
  10.200
  10.060
  9.950
  9.850
  9.760
  9.690
  9.630
  9.580
  9.530
  9.490
  9.450
  9.420
  9.390
  9.360
  9.340
  9.320
  9.300
  9.280
  9.260
  9.250
  9.230
  9.220
  9.210
  9.200
  9.180
  9.170
  9.170
Adjusted equity ratio
  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
  -435
  -381
  -417
  -458
  -502
  -550
  -601
  -656
  -714
  -776
  -841
  -908
  -979
  -1,053
  -1,131
  -1,211
  -1,294
  -1,381
  -1,471
  -1,565
  -1,662
  -1,763
  -1,868
  -1,977
  -2,090
  -2,208
  -2,331
  -2,458
  -2,591
  -2,730
Depreciation, amort., depletion, $m
  2,369
  2,754
  3,171
  3,619
  4,096
  4,604
  5,140
  5,704
  6,296
  6,916
  7,563
  8,238
  8,940
  9,671
  10,431
  11,221
  12,042
  12,896
  13,782
  14,704
  15,663
  16,660
  17,698
  18,779
  19,906
  21,079
  22,304
  23,581
  24,914
  26,307
Funds from operations, $m
  1,934
  2,374
  2,754
  3,161
  3,594
  4,054
  4,538
  5,048
  5,582
  6,140
  6,722
  7,329
  7,961
  8,618
  9,301
  10,011
  10,748
  11,515
  12,311
  13,139
  14,001
  14,897
  15,831
  16,803
  17,816
  18,872
  19,973
  21,123
  22,323
  23,576
Change in working capital, $m
  -3,380
  -3,688
  -3,990
  -4,286
  -4,575
  -4,858
  -5,134
  -5,404
  -5,671
  -5,935
  -6,199
  -6,463
  -6,730
  -7,002
  -7,280
  -7,567
  -7,863
  -8,171
  -8,493
  -8,829
  -9,182
  -9,552
  -9,943
  -10,353
  -10,786
  -11,243
  -11,725
  -12,234
  -12,770
  -13,336
Cash from operations, $m
  5,314
  6,062
  6,744
  7,447
  8,170
  8,911
  9,672
  10,452
  11,252
  12,075
  12,921
  13,792
  14,691
  15,620
  16,581
  17,577
  18,611
  19,686
  20,804
  21,969
  23,183
  24,450
  25,773
  27,156
  28,602
  30,115
  31,698
  33,356
  35,093
  36,912
Maintenance CAPEX, $m
  -2,016
  -2,369
  -2,754
  -3,171
  -3,619
  -4,096
  -4,604
  -5,140
  -5,704
  -6,296
  -6,916
  -7,563
  -8,238
  -8,940
  -9,671
  -10,431
  -11,221
  -12,042
  -12,896
  -13,782
  -14,704
  -15,663
  -16,660
  -17,698
  -18,779
  -19,906
  -21,079
  -22,304
  -23,581
  -24,914
New CAPEX, $m
  -3,538
  -3,850
  -4,166
  -4,475
  -4,777
  -5,072
  -5,360
  -5,643
  -5,921
  -6,197
  -6,472
  -6,748
  -7,027
  -7,311
  -7,601
  -7,900
  -8,210
  -8,532
  -8,867
  -9,218
  -9,587
  -9,974
  -10,381
  -10,810
  -11,262
  -11,739
  -12,242
  -12,773
  -13,333
  -13,924
Cash from investing activities, $m
  -5,554
  -6,219
  -6,920
  -7,646
  -8,396
  -9,168
  -9,964
  -10,783
  -11,625
  -12,493
  -13,388
  -14,311
  -15,265
  -16,251
  -17,272
  -18,331
  -19,431
  -20,574
  -21,763
  -23,000
  -24,291
  -25,637
  -27,041
  -28,508
  -30,041
  -31,645
  -33,321
  -35,077
  -36,914
  -38,838
Free cash flow, $m
  -240
  -158
  -177
  -199
  -226
  -257
  -292
  -330
  -372
  -418
  -467
  -519
  -573
  -631
  -692
  -755
  -820
  -888
  -959
  -1,032
  -1,108
  -1,187
  -1,268
  -1,352
  -1,439
  -1,530
  -1,623
  -1,720
  -1,821
  -1,926
Issuance/(repayment) of debt, $m
  808
  2,651
  2,868
  3,081
  3,289
  3,492
  3,690
  3,885
  4,076
  4,266
  4,456
  4,646
  4,838
  5,033
  5,233
  5,439
  5,652
  5,874
  6,105
  6,347
  6,600
  6,867
  7,147
  7,442
  7,754
  8,082
  8,428
  8,794
  9,180
  9,586
Issuance/(repurchase) of shares, $m
  2,248
  675
  736
  800
  867
  938
  1,011
  1,088
  1,167
  1,250
  1,336
  1,425
  1,517
  1,613
  1,712
  1,815
  1,922
  2,034
  2,150
  2,270
  2,395
  2,526
  2,662
  2,804
  2,951
  3,106
  3,267
  3,435
  3,611
  3,795
Cash from financing (excl. dividends), $m  
  3,056
  3,326
  3,604
  3,881
  4,156
  4,430
  4,701
  4,973
  5,243
  5,516
  5,792
  6,071
  6,355
  6,646
  6,945
  7,254
  7,574
  7,908
  8,255
  8,617
  8,995
  9,393
  9,809
  10,246
  10,705
  11,188
  11,695
  12,229
  12,791
  13,381
Total cash flow (excl. dividends), $m
  2,816
  3,168
  3,428
  3,682
  3,930
  4,173
  4,410
  4,642
  4,871
  5,098
  5,325
  5,552
  5,781
  6,015
  6,254
  6,500
  6,755
  7,019
  7,296
  7,584
  7,887
  8,206
  8,541
  8,894
  9,266
  9,658
  10,072
  10,509
  10,970
  11,456
Retained Cash Flow (-), $m
  -2,248
  -675
  -736
  -800
  -867
  -938
  -1,011
  -1,088
  -1,167
  -1,250
  -1,336
  -1,425
  -1,517
  -1,613
  -1,712
  -1,815
  -1,922
  -2,034
  -2,150
  -2,270
  -2,395
  -2,526
  -2,662
  -2,804
  -2,951
  -3,106
  -3,267
  -3,435
  -3,611
  -3,795
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
  28
  33
  39
  44
  51
  57
  64
  72
  80
  88
  97
  106
  115
  125
  135
  146
  157
  169
  181
  193
  206
  219
  233
  248
  263
  279
  295
  312
  330
  349
Cash available for distribution, $m
  568
  2,493
  2,692
  2,882
  3,063
  3,235
  3,399
  3,555
  3,704
  3,849
  3,989
  4,127
  4,264
  4,402
  4,542
  4,685
  4,832
  4,986
  5,146
  5,314
  5,492
  5,680
  5,879
  6,090
  6,314
  6,552
  6,805
  7,073
  7,358
  7,660
Discount rate, %
  13.60
  14.28
  14.99
  15.74
  16.53
  17.36
  18.23
  19.14
  20.09
  21.10
  22.15
  23.26
  24.42
  25.64
  26.93
  28.27
  29.69
  31.17
  32.73
  34.37
  36.08
  37.89
  39.78
  41.77
  43.86
  46.05
  48.36
  50.78
  53.31
  55.98
PV of cash for distribution, $m
  500
  1,909
  1,770
  1,606
  1,425
  1,238
  1,053
  876
  713
  567
  441
  336
  249
  180
  127
  87
  58
  38
  24
  14
  9
  5
  3
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  36.4
  27.0
  20.3
  15.5
  11.9
  9.2
  7.2
  5.7
  4.5
  3.6
  2.9
  2.3
  1.9
  1.5
  1.3
  1.0
  0.8
  0.7
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.2
  0.1
  0.1
  0.1

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 3.5
Price to Sales 0.8
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 2.5
Price to Free Cash Flow 2.5
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 $941 million for the last fiscal year's total revenue generated by SLM. The default revenue input number comes from 2017 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 17.5% 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 13.6%, 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 44.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $27 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 5.4% 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 3%.

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 2143%.

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 -2052.5%. 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 - $0 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 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 $5.1 billion.

RELATED COMPANIES Price Int.Val. Rating

COMPANY NEWS

▶ Sallie Mae Declares Preferred Stock Series B Dividend   [Jun-21-18 04:30PM  Business Wire]
▶ Sallie Mae Declares Preferred Stock Series B Dividend   [Apr-26-18 04:30PM  Business Wire]
▶ Sallie Mae Recognized as a Leader in Board Diversity   [Apr-25-18 12:17PM  Business Wire]
▶ Sallie Mae: 1Q Earnings Snapshot   [Apr-23-18 04:41PM  Associated Press]
▶ [$$] How Grad Students Can Search for Scholarships   [Apr-08-18 11:54PM  The Wall Street Journal]
▶ Sallie Mae Appoints Nicolas Jafarieh to General Counsel   [Mar-01-18 04:31PM  Business Wire]
▶ Sallie Mae Sets Date for Annual Meeting of Stockholders   [Feb-26-18 02:35PM  Business Wire]
▶ Sallie Mae Declares Preferred Stock Series B Dividend   [Feb-22-18 04:30PM  Business Wire]
▶ Sallie Mae Ranked Among Best Banks of 2018   [Feb-16-18 01:52PM  Business Wire]
▶ Sallie Mae meets 4Q profit forecasts   [Jan-17-18 04:53PM  Associated Press]
▶ ETFs with exposure to SLM Corp. : November 6, 2017   [Nov-06-17 12:30PM  Capital Cube]
▶ Sallie Mae Declares Preferred Stock Series B Dividend   [Oct-26-17 04:31PM  Business Wire]
▶ 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]
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