NAVI

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the consumer finance stocks, including Navient (NASDAQ:NAVI) and its peers. Consumer finance companies provide loans and credit products to individuals. Growth drivers include increasing consumer spending, financial inclusion initiatives in developing markets, and digital lending platforms reducing distribution costs. Challenges include credit risk during economic downturns, regulatory scrutiny of lending practices, and intensifying competition from traditional banks and fintech firms offering innovative credit solutions. The 18 consumer finance stocks we track reported a strong Q2. As a group, revenues were in line with analysts’ consensus estimates. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Spun off from Sallie Mae in 2014 to handle the company's loan servicing and collection operations, Navient (NASDAQ:NAVI) provides education loan servicing and business processing solutions that help manage federal student loans, private education loans, and government services. Navient reported revenues of $147 million, down 10.4% year on year. This print exceeded analysts’ expectations by 2.1%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 1.3% since reporting and currently trades at $9.37. Is now the time to buy Navient? Access our full analysis of the earnings results here, it’s free. Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial (NYSE:BFH) provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants. Bread Financial reported revenues of $993 million, up 6.9% year on year, outperforming analysts’ expectations by 3.5%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and net interest income in line with analysts’ estimates. The market seems happy with the results as the stock is up 5.6% since reporting. It currently trades at $107.56. Is now the time to buy Bread Financial? Access our full analysis of the earnings results here, it’s free. Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE:NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans. Nelnet reported revenues of $358.7 million, down 30.5% year on year, falling short of analysts’ expectations by 14.6%. It was a disappointing quarter as it posted a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates. Nelnet delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 5.3% since the results and currently trades at $127.74. Read our full analysis of Nelnet’s results here. Founded in 1972 by Donald Foss to serve customers overlooked by traditional lenders, Credit Acceptance (NASDAQ:CACC) provides auto financing solutions that enable car dealers to sell vehicles to consumers with limited or impaired credit histories. Credit Acceptance reported revenues of $415 million, up 1.7% year on year. This print came in 12% below analysts’ expectations. Overall, it was a softer quarter as it also produced a significant miss of analysts’ EBITDA estimates. The stock is up 2.7% since reporting and currently trades at $603.47. Read our full, actionable report on Credit Acceptance here, it’s free. Recognizable by its iconic green logo and the slogan "Don't leave home without it," American Express (NYSE:AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses. American Express reported revenues of $18.55 billion, up 12.8% year on year. This result lagged analysts’ expectations by 5.8%. Overall, it was a softer quarter for the company. The stock is down 1.4% since reporting and currently trades at $336.05. Read our full, actionable report on American Express here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Navient has been treading water for the past six months, recording a small return of 5% while holding steady at $9.36. The stock also fell short of the S&P 500’s 10.5% gain during that period. Is there a buying opportunity in Navient, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free. We don’t have much confidence in Navient. Here are three reasons why there are better opportunities than NAVI, plus one stock we’d rather own. Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Navient’s demand was weak and its revenue declined by 21.6% per year. This was below our standards and signals it’s a low quality business. Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions. Sadly for Navient, its EPS and revenue declined by 15.7% and 21.6% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Navient’s low margin of safety could leave its stock price susceptible to large downswings. The debt-to-equity ratio is a widely used measure to assess a company’s balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk. If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments. Navient currently has $44.43 billion of debt and $2.40 billion of shareholders’ equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 18.9×. We think this is dangerous - for a financials business, anything above 3.5× raises red flags. Navient falls short of our quality standards. With its shares underperforming the market lately, the stock trades at 11.4× forward P/E (or $9.36 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think other companies feature superior fundamentals at the moment. We’d recommend looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce. ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Navient’s second quarter results were met with a negative market reaction, as investors focused on the continued year-over-year revenue decline, despite the company exceeding Wall Street’s profit expectations. Management attributed the quarter’s performance to the initial benefits of its strategic transformation, including a significant reduction in operating expenses and a shift in product mix. CEO Edward Bramson highlighted that private loan originations increased more than 60% compared to last year, driven by demand in student loan refinancing, while operating expenses fell 18% year-over-year. Bramson also noted, “We’re already benefiting from this transformation,” referencing progress in aligning the business toward growth segments. Is now the time to buy NAVI? Find out in our full research report (it’s free). Revenue: $147 million vs analyst estimates of $143.9 million (10.4% year-on-year decline, 2.1% beat) Adjusted EPS: $0.29 vs analyst estimates of $0.20 (46.4% beat) Operating Margin: 28.6%, up from 11% in the same quarter last year Market Capitalization: $829 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. William Ryan (Seaport Research Partners) asked about the implications of adopting fair value accounting for new in-school loans and the potential mix between loan sales, securitizations, and balance sheet retention. CFO Stephen Hauber explained that the mix would depend on deal economics but expects most new originations to be securitized in the near term. William Ryan (Seaport Research Partners) requested clarification on the initial fair value mark for new in-school loans, inquiring if it would be positive compared to CECL-based provisioning. Hauber stated that they are confident in the valuation, but exact figures will depend on the actual loans originated in the third quarter. Moshe Orenbuch (TD Cowen) sought details on the $23 million reserve build in the private loan portfolio, questioning whether it related more to newer or legacy loans. Hauber clarified that it primarily related to the legacy portfolio, attributing the build to a slower pace of improvement in credit trends than expected. Moshe Orenbuch (TD Cowen) asked about the impact of rising interest rates on refinance loan spreads and demand. CEO Edward Bramson acknowledged that current net interest margins are lower due to higher rates but emphasized maintaining share growth despite these headwinds. William Ryan (Seaport Research Partners) followed up on share buyback levels and future capital requirements. Hauber indicated that while buybacks were lower in the quarter, the company retains capacity for further repurchases, and expects to manage its equity ratio within an 8% to 9% range. Looking ahead, the StockStory team will be watching (1) whether Navient can sustain growth in student loan refinancing and in-school loan originations, (2) the impact of new fair value accounting on reported results and provisioning volatility, and (3) the pace of legacy loan portfolio sales and capital redeployment. Additionally, monitoring ongoing credit performance and cost management will be key indicators of execution against the company’s strategy. Navient currently trades at $9.06, down from $9.49 just before the earnings. Is there an opportunity in the stock? The answer lies in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5:00 p.m. ET Treasurer and Head of Investor Relations - Roger Yankoupe Chief Executive Officer and Chair of the Board - Edward Bramson Chief Financial Officer - Stephen Hauber Operator: Good day, and welcome to the Navient Second Quarter 2026 Earnings Conference Call. This call is being recorded. [Operator Instructions] At this time, I will turn the call over to Roger Yankoupe, Navient's Treasurer and Head of Investor Relations. Please go ahead. Roger Yankoupe: Hello. Good afternoon, and welcome to Navient's earnings call for the second quarter of 2026. Joining me today are Ed Bramson, Navient's Chief Executive Officer and Chair of the Board; and Steve Hauber, Navient Chief Financial Officer. After Ed and Steve's prepared remarks, we will open up the call for questions. Today's discussion is accompanied by a presentation, which you can find on navient.com/investors. Before we begin, keep in mind our discussion will contain predictions, expectations, forward-looking statements and other information about our business that is based on management's current expectations as of the date of the presentation. Actual results in the future may differ materially from those discussed today due to a variety of risks and uncertainties. Listeners should refer to the discussion of those factors on the company's Form 10-K and other filings with the SEC. During this conference call, we will refer to certain non-GAAP financial measures, including core earnings, adjusted tangible equity ratio and various other non-GAAP financial measures derived from core earnings. Our GAAP results, description of our non-GAAP financial measures and a reconciliation of core earnings to GAAP results can be found in Navient's second quarter 2026 earnings release, which is posted on our website. Thank you. And I will now turn the call over to Ed. Edward Bramson: Thank you, Roger, and thank you to everyone for joining the call today. Before turning to the results themselves, I want to express our thanks to Dave Yowan, our predecessor CEO, who stepped down from the role in June of this year. David led the Navient team through a period of significant strategic change. Under his leadership, we bolstered our liquidity and accomplished a major structural reduction in fixed costs. This has put us in a much stronger position to compete in the areas that represent our future growth. In fact, we're already benefiting from this transformation, and I'll highlight a few of these benefits later in my remarks. As you have seen from the release, Navient's second quarter core earnings were $0.29 a share. During the quarter, a few significant items affected the results. We realized a gain on investment. This was partially offset by regulatory and restructuring expenses and the upfront expense from electing to call a FFELP securitization trust. The net impact of those items was a benefit of about $0.04 per share. So excluding them, core EPS would have been $0.25 for the quarter, and that compares to core EPS of $0.20 in 2025. Steve will discuss these items when he takes you through the slide presentation, and he will also cover some adjustments to loss provisions in the private loan back book, which mostly offset each other in the quarter. There are a couple of trends in the second quarter that I think are worth highlighting as they indicate that we're seeing the initial benefits from our strategic transformation program. I also want to mention a change in capital allocation, which will support the acceleration in growth that we're experiencing. First thing I'd like to highlight is originations, which grew in both refinance and in-school products. Combined originations were up by more than 60% versus the same quarter of 2025 to $815 million in total. The second item was operating expenses, which were 18% lower than they were in Q2 of last year. The rapid growth in our private loan originations in the current quarter was principally due to increased demand for student loan refinancing. In the second half of this year, we expect also to have demand for our in-school products, which will increase significantly as well, partly due to seasonality and partly to changes in government policy in graduate education lending. Looking a bit further ahead, as we complete the testing phase of our new personal loan products, we can foresee additional demand growth for them in 2027 and beyond. With respect to the capital allocation that I mentioned earlier, with this level of growth in originations, we think it now makes sense to consider redeploying some of the capital from our large portfolio of private legacy loans into the more strategically important product areas that we're now focusing on. Our legacy private loan portfolio is around $5.4 billion and is profitable. But we don't make those type of loans anymore, so they really don't help us strategically and the gradual decline in balances doesn't fit with our growth objectives. As a result, at the end of Q2, we classified $528 million or just under 10% of these legacy loans as held for sale, and we may consider reclassifying more of them in the future. The reclassification of at least $19 million of allowance for losses related to these loans, which we've essentially reallocated back to the balance of the loan portfolio. We've also made a change that relates to our in-school products, both graduate and undergraduate. Beginning in Q3, we will be accounting for newly originated in-school loans at fair value. The loans we originated in Q2 and earlier are unaffected and will continue to be accounted for at amortized cost less the CECL reserve. Since essentially all of these future originations are intended to be securitized or sold, we believe the fair value will represent the economic impact of these products on our financial position measure. Steve will be taking you through the slide presentation. At this point, I'll turn it over to you. Stephen Hauber: Thank you, Ed. I appreciate everyone joining us for today's call. In the second quarter, we delivered strong business performance and solid financial results and took steps to better position the company around today's lending products. I'll provide additional detail on the quarter, starting with Slide 4. Core earnings per share were $0.29 for the quarter. Our results included several significant items, a $12 million realized gain on an investment, partially offset by a $3 million loss resulting from the call of a FFELP securitization trust and $4 million of regulatory and restructuring expenses. In total, these items contributed a net $0.04 to second quarter results. We also recorded provision of $26 million in the quarter, which I'll cover in more detail when we review the allowance. Moving to Slide 5. Earnest continues to drive sustained demand and originations growth in our refinance product. Rate check and origination volume were both up over 60% compared to a year ago. The $735 million of originations in the quarter brings year-to-date originations above $1.5 billion, keeping us on pace with our 2026 origination volume outlook. Credit quality also remains strong with weighted average FICO on new refinance originations at 774 and roughly 60% of our volume coming from borrowers with graduate degrees. In addition to improving operating leverage from higher volume, we also saw lower cost of acquisition year-over-year. Slide 6 covers in-school lending. We originated $80 million of volume in the quarter, up 40% from the same period last year. That momentum has continued in recent weeks with year-over-year growth rates continuing to build as we move through peak season and serve borrowers and schools in the expanded graduate school market. Importantly, we are achieving this growth while also improving efficiency year-over-year. As Ed mentioned, we have elected the fair value option for in-school loans originated after June 30, 2026. Under this accounting model, we will record these loans at fair value on our balance sheet with no CECL allowance or provision. Under the prior model, in-school originations in the back half of the year would have resulted in additional provision expense in 2026. The fair value option better aligns the accounting with how we manage and evaluate these loans while also removing that near-term provision impact. Slide 7 summarizes our Consumer Lending segment results for the second quarter. Net income was $27 million compared with $26 million a year ago. These results included a $6 million year-over-year increase in expenses, primarily reflecting marketing and origination-related costs associated with higher volume. Even with that higher spend, our lending efficiency metrics continue to improve as we scale and optimize our strategies. Turning to credit. Private delinquency rate improved modestly in the second quarter. Private charge-off rates decreased from 1.9% in the first quarter to 1.8% in the second quarter. Delinquencies also improved with 31-plus rates declining from 5.5% to 5.4% and 91-plus rates declining from 2.5% to 2.4%. Let's move to Slide 8 and the allowance for loan losses. We recorded $26 million of provision in the second quarter with $8 million related to FFELP and $18 million related to the private loan portfolio. The private provision had 3 components. First, we recorded $14 million of provision associated with second quarter originations. The second component relates to the $528 million of legacy loans that we classified as held for sale at the end of the second quarter, consistent with our broader effort to align the balance sheet with today's lending products. We recognized a $19 million provision benefit from releasing the allowance associated with those loans. The third component is a $23 million reserve build on the remaining private portfolio. While private credit performance continued to improve in the second quarter, the pace of improvement moderated as the quarter progressed. Given those trends and the broader macroeconomic environment, the build reflects our current view of lifetime loss expectations across the remaining private portfolio as we continue to monitor performance. Slide 9 summarizes the results of our Federal Education Loan segment. Net income was $26 million compared with $30 million a year ago. As expected, net interest income and operating expenses both declined as the FFELP portfolio continued to pay down. Second quarter results also reflect the acceleration of $3 million of interest expense from the call of a securitization trust. While that reduced earnings in the quarter, the trust call is expected to lower interest expense in future periods and provide additional liquidity. FFELP credit trends continue to normalize as disaster forbearance-related activity subsided. FFELP charge-off rates improved from 29 basis points in the first quarter to 18 basis points in the second quarter, and 91-plus delinquency rates declined to 8.0%, which is 50 basis points better than last quarter and more than 200 basis points lower than the year ago quarter. Expense results are on Slide 10. Total expenses in the second quarter were $85 million compared with $100 million in the second quarter of 2025. Year-to-date operating expenses, excluding regulatory and restructuring expenses were $167 million. We remain on pace for our full year operating expense outlook of $350 million or lower. Capital and financing activity are highlighted on Slide 11. During the quarter, we completed our first in-school securitization of the year and our second refinance loan securitization. We continue to see strong investor demand for our recently originated refinance and in-school loans, and we are achieving attractive pricing and advance rates on these securitizations. We also issued $500 million of unsecured debt while retiring approximately $500 million of unsecured bonds at maturity. We continue to have ample capacity to invest in attractive loan originations while maintaining balance sheet flexibility. In the second quarter, we returned $17 million to shareholders through dividends and share repurchases. In summary, the second quarter continued our solid start to the year and reflected the progress we are making in positioning the company around today's lending products and future growth. The fair value option for new in-school originations and the held-for-sale classification of a portion of the legacy private portfolio both support that strategic direction. We enter the back half of the year with strong lending activity and are encouraged about both our sustained refinance growth and our ability to compete in the expanded graduate in-school lending market. We remain focused on executing with discipline as we build from that position. Before we move to Q&A, I want to thank the Navient team for their continued focus and contributions throughout the quarter. We appreciate your time, and we'll now open the call for questions. Operator: [Operator Instructions] We'll take our first question from Bill Ryan with Seaport Research Partners. William Ryan: Also kind of glad to see you adopt fair value accounting. I know we've had discussions about that over the past, I think, about a year now. But if you can maybe talk about on the fair value side of the equation, looking forward in terms of your loan sales and if you're talking about doing some loan sales through ABS, some to investors and maybe some on the balance sheet, could you maybe give us some idea of what the mix of what you're anticipating that will look like going forward? And as it relates to the fair value accounting itself, what the initial economics might look like relative to where the CECL charge is today on the loans? Stephen Hauber: Yes. I'll cover the back half of that first. In terms of the economics from the adoption of the fair value option, the way to look at that for our in-school product, given our lending mix over the past 6 to 12 months between graduate and undergraduate and really the overall mix of the loans that we've been generating, we've been at a net reserve rate in the low to mid-3% range. So when you think about the provision, it's really -- that's the reserve rate applied against volume expectations. Our expectations for the full year on the in-school side were for 50% growth, and that was on a base of $401 million from last year. So if you look at that, that would put it just above $600 million for the year. We've done $120 million through the first half of the year. So around $480 million or so of originations would be in our outlook, which is still on track, and you can use that along with the net reserve rate in order to estimate really the impact kind of above and beyond what our original outlook was for EPS for the year. William Ryan: Okay. And just quickly on that question on the initial fair value mark, obviously, the CECL going away, will the initial fair value mark be in positive territory, I assume it is given the duration of the loans? Stephen Hauber: Yes, we feel good about the valuation. Of course, the exact number of the valuation will depend upon the loans that we're generating as we speak here in the third quarter. And so TBD in terms of exactly where that comes out in terms of the fair value mark, we'll be looking forward to providing that information when we close out the third quarter and share results here in the next call. William Ryan: Okay. And then just kind of going back to the first part of that question. The thought process between what you might be going -- passing through in securitizations versus loan sales versus retaining on the balance sheet? And will the securitization structures change in any way to be off balance sheet or will they still be on balance sheet? Stephen Hauber: I think our expectation would be, I mean, similar structure or same structure in terms of securitizations and how we structure them on balance sheet. In terms of the question of how much would we be retaining on our balance sheet versus selling or securitizing selling, I think all of that depends upon the general economics of the deals in question and what we see in terms of kind of from a deal-to-deal basis, what makes the most sense for us. So we have experience kind of across all of those different options. And so I'd say there's not a kind of a change in direction right now, but certainly open to kind of whatever avenue makes the most economic and strategic sense for us. Edward Bramson: Just to add to that a little bit, specifically with relation to in-school, the volumes we've had have been relatively small. So your options on what to do with them are somewhat limited. So we -- that's why the sales for us is ABS. As you start to get more merchandise, you might start to look to actually do complete sales. But for right now, I would look at it as it's essentially all going to be securitized in the short run. Operator: [Operator Instructions] We'll take our next question from Moshe Orenbuch with TD Cowen. Moshe Orenbuch: I was hoping we could get a little more detail on that $23 million reserve increase in the private loan portfolio. I mean, is that primarily on the newer loans that you've been making? Is that on the loans -- the older loans that are the legacy loans that you just took a $19 million reserve back on? Like what -- which ones are those? Stephen Hauber: Yes, sure. It's a mix. I mean it's primarily on the legacy loans, private legacy loans. So when Ed talked about the $5.5 billion balance, which represents our legacy portfolio, that's where the bulk of the adjustment is. I think the way we're thinking about that $23 million, the charge-offs and delinquency rates in the quarter, while they improved, the pace of improvement was a lot higher kind of from fourth quarter to first quarter, saw some improvement in the first half of the second quarter and then that started flattening out some. So I felt like in light of that, it made sense for us to address the uncertainty there by booking this additional reserve build. And like I said, it primarily relates to the legacy portfolio. Moshe Orenbuch: So they improved just not as much as you expected, I guess, is that what you're saying? Stephen Hauber: That's exactly right. So we're operating still at a bit of an elevated level compared to what our longer-term historical norms were. We expect continued improvement here, which will put us more in line with what those historical norms would be. So exactly right that really the pace of improvement during the quarter was a little bit shy of what we expected, and so we provided accordingly. Moshe Orenbuch: But the loans that you chose to classify as held for sale, I guess you pick those to be better than the ones that are still on the balance sheet. Is that a fair understanding? Stephen Hauber: I'd say not really. I'd say it's a discrete portfolio or segment within that portfolio that we are evaluating and have the intent to sell. So it was a portfolio where when we made that determination, the reserve gets released from there, the reserve build for the remainder of the portfolio, not for that portfolio. So really, they're kind of independent items. However, they both relate to that legacy loan portfolio in general. Edward Bramson: I think an additional point is that if you look at the overall portfolio, a lot of it is securitized. So a part of it, you have a risk retention requirement that makes it more difficult if you did want to sell them. This particular portfolio did not have that. So that's a reason for it. Moshe Orenbuch: Got it. And then as we think about the refinance market and your cost of funds, right, interest rates have been rising somewhat. So when you think about the second half of the year, you mentioned that demand is strong. How should we think about the spread on those loans? Edward Bramson: It's not a great period at this moment. Rates are higher long-term reason to do this, and we're gaining share and we want to do that. The NIM isn't the same as you get on other products, but the losses are lower, too. So I think we're thinking in the second half will probably be total like first. Moshe Orenbuch: Got it. And then given this -- all these changes, in other words, more originations and other sort of things going on, I noticed that the buyback was relatively low in Q2. Should we think about that as kind of a level for the back half of the year? Or is there something unusual in the second quarter? Edward Bramson: You want to take that one? Stephen Hauber: Yes. I mean I think, first of all, the -- we have a $100 million authorization for the year, and I have, I think, around $75 million, $76 million remaining. So I think what we saw in the second quarter was certainly lower than what we had in the first quarter. And I think we have capacity to do more share repurchases as conditions warrant in the back half of the year. Ed, I don't know if you want to add to that. Edward Bramson: Well, I would say there are 2 things. One of them is, obviously, if you're going to grow at the rates we're growing at, you need to think about how you're going to provide the capital for. That's the broad issue. The narrow one is that for a large part of the quarter, we're really buying under a 10b5-1 plan. And so if you set the number where we did, we don't buy any shares. So I wouldn't read too much into this quarter, but it's a fair question. Operator: [Operator Instructions] We have a follow-up from Bill Ryan with Seaport Research Partners. William Ryan: Yes. Just a couple of follow-ups. One, just for clarification purposes. The $23 million on the private portfolio, the legacy portfolio, it sounds like you feel like based on what you know today that you're fully trued up on the reserve level on the private portfolio. And the second question is maybe if you could talk about what you expect your capital requirements are going to be in terms of your adjusted tangible equity ratio going forward? Stephen Hauber: So first on the loan loss reserve, and we go through a very thorough process every quarter, evaluating not only the trends that we're seeing, but the composition of the portfolio, macroeconomics, et cetera. And so as with every quarter, we put that through a very thorough review process, feel good about where we ended up at the quarter. Of course, there's always uncertainty. And so we'll continue to evaluate the reserve as we move to the third and fourth quarter and onward like we always would do. In terms of the adjusted tangible equity ratio, you can see that we went up slightly from, I think, 8.9% to 9% during the quarter here. We've been managing that at a level of 8% or above. So I think kind of being in that 8% to 9% range is a reasonable expectation going forward. Operator: [Operator Instructions] It appears we have no further questions at this time. I will turn the floor back to Roger Yankoupe for closing remarks. Roger Yankoupe: Thanks, Tasha. Thank you for joining today's call and for your continued interest in Navient. If you have any follow-up questions, please contact me or Mike Andrews. We look forward to speaking with you again next quarter. Thank you. Operator: This concludes today's meeting. We appreciate your time and participation. You may now disconnect. Thank you. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Navient (NAVI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved a 60% year-over-year increase in combined originations, driven by robust demand in student loan refinancing and in-school products. Realized an 18% reduction in operating expenses compared to Q2 2025, reflecting the initial benefits of a structural fixed-cost reduction program. Initiated a capital reallocation strategy by classifying $528 million of legacy private loans as held for sale to fund higher-growth strategic initiatives. Attributed the surge in private loan originations to increased demand for refinancing, with 60% of volume coming from graduate degree holders. Transitioned to fair value accounting for new in-school originations to better align financial reporting with the economic reality of loans intended for sale or securitization. Maintained strong credit quality in new originations, evidenced by a weighted average FICO of 774 for the refinance portfolio. Expects significant demand growth for in-school products in the second half of 2026 due to seasonality and favorable government policy changes in graduate lending. Anticipates the completion of personal loan product testing to drive additional demand growth starting in 2027. Projects full-year operating expenses to remain at or below $350 million, supported by ongoing efficiency optimizations. Assumes continued utilization of securitization markets for new originations, with potential for direct loan sales as volume scales. Maintains a target adjusted tangible equity ratio between 8% and 9% to balance growth capital needs with shareholder returns. Recorded a $23 million reserve build on the legacy private portfolio as the pace of credit improvement moderated more than management anticipated. Recognized a $19 million provision benefit from releasing allowances related to legacy loans reclassified as held for sale. Executed a FFELP securitization trust call, resulting in a $3 million upfront expense but expected to lower future interest costs and improve liquidity. Reported a $12 million gain on investment, which partially offset regulatory and restructuring expenses during the quarter. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that the fair value option eliminates the near-term provision impact (previously a 3% to 3.5% reserve rate) for the $480 million in projected H2 originations. Confirmed that while securitization remains the primary exit strategy, the company is open to whole-loan sales as merchandise volume increases. The build primarily relates to the $5.5 billion legacy portfolio where delinquency and charge-off improvements flattened out toward the end of the quarter. Management characterized the move as addressing uncertainty rather than a sharp decline in credit, as credit performance improved modestly in the second quarter compared to the first quarter of 2026. Management acknowledged that higher long-term rates have pressured Net Interest Margin (NIM) in the refinance segment. Stated the strategic priority is gaining market share despite tighter spreads, noting that lower loss profiles in this segment help offset the margin compression. Attributed the lower Q2 buyback volume to 10b5-1 plan constraints and the need to prioritize capital for rapid origination growth. Confirmed approximately $75 million remains on the current authorization, with capacity to execute in the second half as conditions warrant.

Shares of Navient Corporation NAVI gained 4.8% in yesterday’s trading session after reporting better-than-expected results. The company’s second-quarter 2026 earnings per share (EPS) of 29 cents surpassed the Zacks Consensus Estimate of 19 cents. It reported earnings of 21 cents in the prior-year quarter. Results benefited from lower expenses and a decline in provisions for loan losses. However, a decrease in net interest income (NII) and other income acted as a headwind. Navient’s GAAP net income was $25 million compared with $14 million in the prior-year quarter. NII declined 8.3% year over year to $120 million in the second quarter. It missed the Zacks Consensus Estimate of $129.1 million by 7%. Total other income decreased 18.2% year over year to $27 million. Provision for loan losses was $26 million, down from $37 million in the prior-year quarter. Total expenses decreased 15.8% year over year to $85 million. Federal Education Loans: The segment generated a net income of $26 million, which declined 13.3% year over year. As of June 30, 2026, the company’s net FFELP loans were $26.6 billion, down 10.3% sequentially. Consumer Lending: This segment reported a net income of $27 million, which increased 3.8% from the year-ago quarter. The private education loan delinquency rate greater than 30 days was 5.4% compared with 6.4% in the prior-year quarter. As of June 30, 2026, the company’s private education loans were $15.7 billion, which increased marginally from the prior quarter. Navient originated $735 million of private education refinance loans in the reported quarter. To meet liquidity needs, NAVI expects to utilize various sources, including cash on hand, unencumbered education loan portfolios, operating cash flows, repayments of principal on unencumbered education loan assets and distributions from securitization trusts. It may also draw down on the secured FFELP Loan and Private Education Loan facilities, issue term asset-backed securities (ABS), enter additional Private Education Loan and ABS repurchase facilities, or issue additional unsecured debt. Notably, the company had $770 million of cash and cash equivalents as of June 30, 2026. In the second quarter, the company paid $15 million in common stock dividends. In the reported quarter, Navient repurchased shares of common stock for $2 million. Navient’s second-quarter results benefited from lower expenses and a decline in provisions for loan losses. The year-over-year improvement in Consumer Lending net income and solid private education refinance loan originations were other positives. However, lower NII and other income remained concerns. The continued decline in the FFELP loan portfolio is also likely to weigh on interest income, while the company’s disciplined expense management should provide some support to financial performance. Navient Corporation price-consensus-eps-surprise-chart | Navient Corporation Quote Currently, NAVI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Capital One Financial’s COF second-quarter 2026 adjusted earnings of $5.81 per share significantly outpaced the Zacks Consensus Estimate of $4.85. The bottom line was up from $5.48 in the prior-year quarter. Results benefited from a rise in net interest income and non-interest income, along with a substantial decline in provisions. Loan growth and improvement in net interest margin were other positives. However, higher expenses and a sequential decline in deposits were undermining factors for COF. Enova International, Inc. ENVA reported second-quarter 2026 adjusted earnings per share of $4.31, which increased from $3.23 in the prior-year quarter. The metric surpassed the Zacks Consensus Estimate of $3.99. ENVA’s results were aided by increased revenues and improving credit quality. However, an increase in expenses was a headwind. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Navient Corporation (NAVI) : Free Stock Analysis Report Capital One Financial Corporation (COF) : Free Stock Analysis Report Enova International, Inc. (ENVA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Navient (NAVI) reported $120 million in revenue for the quarter ended June 2026, representing a year-over-year decline of 8.4%. EPS of $0.29 for the same period compares to $0.21 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $129.07 million, representing a surprise of -7.03%. The company delivered an EPS surprise of +52.63%, with the consensus EPS estimate being $0.19. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Navient performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Net interest margin, Consumer Lending segment: 2.3% versus 2.5% estimated by two analysts on average. Net interest margin, Federal Education Loan segment: 0.7% versus 0.7% estimated by two analysts on average. Total Non-Interest Income (Core): $27 million compared to the $16.07 million average estimate based on three analysts. Net Interest Income (Core): $120 million versus $128.98 million estimated by three analysts on average. Servicing revenue: $10 million compared to the $12.4 million average estimate based on three analysts. Total core other income- Consumer Lending: $2 million versus $3.05 million estimated by two analysts on average. Total core other income- Federal Education Loans: $8 million compared to the $9.56 million average estimate based on two analysts. Total core other income- Other: $17 million versus the two-analyst average estimate of $5 million. Net interest income (loss)- Federal Education Loans (Core): $48 million versus the two-analyst average estimate of $46.7 million. Net interest income (loss)- Consumer Lending (Core): $93 million compared to the $101.94 million average estimate based on two analysts. Net interest income (loss)- Other (Core): $-21 million compared to the $-18.66 million average estimate based on two analysts. View all Key Company Metrics for Navient here>>> Shares of Navient have returned +12.1% over the past month versus the Zacks S&P 500 composite's +3.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Navient Corporation (NAVI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Ezcorp (EZPW) came out with quarterly earnings of $0.47 per share, beating the Zacks Consensus Estimate of $0.39 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +20.51%. A quarter ago, it was expected that this consumer financial services company would post earnings of $0.36 per share when it actually produced earnings of $0.58, delivering a surprise of +61.11%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Ezcorp, which belongs to the Zacks Financial - Consumer Loans industry, posted revenues of $418.75 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.40%. This compares to year-ago revenues of $310.98 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Ezcorp shares have added about 59.6% since the beginning of the year versus the S&P 500's gain of 13%. While Ezcorp has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Ezcorp was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.48 on $435 million in revenues for the coming quarter and $2.00 on $1.67 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Consumer Loans is currently in the top 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Navient (NAVI), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This student loan servicing company is expected to post quarterly earnings of $0.19 per share in its upcoming report, which represents a year-over-year change of -9.5%. The consensus EPS estimate for the quarter has been revised 18.2% lower over the last 30 days to the current level. Navient's revenues are expected to be $129.07 million, down 1.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EZCORP, Inc. (EZPW) : Free Stock Analysis Report Navient Corporation (NAVI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Navient (NAVI) came out with quarterly earnings of $0.29 per share, beating the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.21 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +52.63%. A quarter ago, it was expected that this student loan servicing company would post earnings of $0.17 per share when it actually produced earnings of $0.2, delivering a surprise of +17.65%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Navient, which belongs to the Zacks Financial - Consumer Loans industry, posted revenues of $120 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 7.03%. This compares to year-ago revenues of $131 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Navient shares have lost about 30.3% since the beginning of the year versus the S&P 500's gain of 12.8%. While Navient has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Navient was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.07 on $134.32 million in revenues for the coming quarter and $0.71 on $528.52 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Consumer Loans is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Credicorp (BAP), another stock in the broader Zacks Finance sector, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 13. This Peruvian finance company is expected to post quarterly earnings of $7.20 per share in its upcoming report, which represents a year-over-year change of +15.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Credicorp's revenues are expected to be $1.72 billion, up 9.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Navient Corporation (NAVI) : Free Stock Analysis Report Credicorp Ltd. (BAP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research