Navient (NASDAQ:NAVI) Shares Gap Down Following Weak Earnings

Key Points

• Navient Corporation's shares experienced a significant decline, opening at $13.00 after closing at $13.79, with current trading at $13.47 and a volume of 230,968 shares.
• Recent analyst ratings show a mix of opinions, with TD Cowen downgrading the stock to "strong sell" while JPMorgan Chase & Co. raised its price target to $15.50, contributing to a consensus rating of "Hold" from analysts.
• The company reported quarterly earnings of $0.28 per share, surpassing analysts’ expectations, and announced a quarterly dividend of $0.16 per share, reflecting a payout ratio of 128.00%.

Navient Corporation (NASDAQ:NAVI - Get Free Report) shares gapped down before the market opened on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $13.79, but opened at $13.00. Navient shares last traded at $13.47, with a volume of 230,968 shares traded.

The credit services provider reported $0.21 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.27 by ($0.06). The business had revenue of $156.00 million for the quarter, compared to the consensus estimate of $156.20 million. Navient had a return on equity of 4.08% and a net margin of 0.89%. During the same quarter in the previous year, the company posted $0.29 earnings per share.

Navient Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, June 20th. Investors of record on Friday, June 6th were issued a $0.16 dividend. This represents a $0.64 dividend on an annualized basis and a dividend yield of 5.1%. The ex-dividend date was Friday, June 6th. Navient's dividend payout ratio (DPR) is currently 206.45%.

Wall Street Analysts Forecast Growth

A number of brokerages recently issued reports on NAVI. Jefferies Financial Group cut their target price on Navient from $14.00 to $12.00 and set a "hold" rating on the stock in a report on Monday, April 21st. TD Securities increased their target price on Navient from $11.00 to $12.00 and gave the stock a "sell" rating in a report on Thursday, May 1st. JPMorgan Chase & Co. increased their target price on Navient from $12.50 to $15.50 and gave the stock a "neutral" rating in a report on Friday, July 11th. Keefe, Bruyette & Woods cut their target price on Navient from $16.50 to $15.00 and set a "market perform" rating on the stock in a report on Thursday. Finally, Morgan Stanley cut their target price on Navient from $15.00 to $14.00 and set an "equal weight" rating on the stock in a report on Thursday. Three investment analysts have rated the stock with a sell rating, six have assigned a hold rating and one has issued a strong buy rating to the company. According to data from MarketBeat, Navient has a consensus rating of "Hold" and a consensus target price of $13.56.

Institutional Investors Weigh In On Navient

Several large investors have recently made changes to their positions in NAVI. Raymond James Financial Inc. purchased a new stake in shares of Navient during the 4th quarter valued at $167,000. KLP Kapitalforvaltning AS purchased a new stake in shares of Navient during the 4th quarter valued at $432,000. JPMorgan Chase & Co. increased its position in shares of Navient by 143.0% during the 4th quarter. JPMorgan Chase & Co. now owns 356,405 shares of the credit services provider's stock valued at $4,737,000 after purchasing an additional 209,744 shares during the last quarter. Arrowstreet Capital Limited Partnership increased its position in shares of Navient by 51.3% during the 4th quarter. Arrowstreet Capital Limited Partnership now owns 555,634 shares of the credit services provider's stock valued at $7,384,000 after purchasing an additional 188,399 shares during the last quarter. Finally, Wellington Management Group LLP increased its position in shares of Navient by 47.4% during the 4th quarter. Wellington Management Group LLP now owns 1,315,841 shares of the credit services provider's stock valued at $17,488,000 after purchasing an additional 423,013 shares during the last quarter. 97.14% of the stock is owned by hedge funds and other institutional investors.

Navient Trading Down 2.2%

The stock has a market capitalization of $1.28 billion, a PE ratio of 40.84 and a beta of 1.37. The firm has a 50-day moving average price of $13.99 and a 200-day moving average price of $13.41. The company has a current ratio of 9.94, a quick ratio of 9.88 and a debt-to-equity ratio of 16.52.

About Navient

Navient Corporation provides technology-enabled education finance and business processing solutions for education, health care, and government clients in the United States. It operates through three segments: Federal Education Loans, Consumer Lending, and Business Processing. The company owns Federal Family Education Loan Program (FFELP) loans that are insured or guaranteed by state or not-for-profit agencies; and performs servicing on its portfolios, as well as federal education loans held by other institutions.