Navient Corporation (NASDAQ:NAVI) seems to be a solid bet now, backed by inorganic growth efforts and promising earnings projections. Also, it continues to deploy technology platform and digital marketing tools to attract loan originations that bode well for financials.
Navient is the biggest portfolio holder of education loans insured or guaranteed under the Federal Family Education Loan Program and Private Education Loans.
The Zacks Consensus Estimate for the company’s earnings for the current year and 2020 earnings has been revised 2.9% and 26.2% upward, respectively, over the past 30 days. This reflects analysts’ optimism surrounding its earnings growth potential and thus substantiates the company’s Zacks Rank #1 (Strong Buy).
Notably, Navient’s shares have gained 62.1% so far this year compared with 30.5% growth recorded by the industry.
Why Navient is an Attractive Pick
Earnings Per Share Strength: Navient’s long-term (three-five years) estimated EPS growth rate of 25% promises rewards for investors over the long run. Also, it recorded an average positive earnings surprise of 22% over the trailing four quarters. Further, earnings growth for this year is projected at 20.6%.
Inorganic Growth Routes: Navient seems on track with initiatives that lay the foundation for independent growth. Since 2015, the company has been strengthening asset recovery and business process outsourcing capabilities through acquisitions. Notably, in November 2017, it acquired Earnest, a financial technology and education-finance company serving consumers that are unable to get finance from traditional banks. Its focus on tapping growth opportunities to boost overall business seems encouraging.
Superior Return on Equity (ROE): Navient’s ROE of 17.5%, compared with the industry average of 13.7%, reflects the company’s commendable position over its peers.
Stock is Undervalued: The stock currently has a Value Score of A. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Considering the above positive traits, we believe investing in Navient should not disappoint you.
Other Stocks to Consider
Enova International, Inc. (NYSE:ENVA) has been witnessing upward estimate revisions for the past 30 days. Additionally, the stock has jumped more than 12% so far this year. It currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Encore Capital Group Inc (NASDAQ:ECPG) has been witnessing upward estimate revisions for the past 30 days. Also, the company’s shares have risen nearly 51.3% year to date. It holds a Zacks Rank of 2, at present.
CURO Group Holdings Corp. (NYSE:CURO) has been witnessing upward estimate revisions for the past 30 days. Also, the company’s shares have risen nearly 43.6% year to date. It carries a Zacks Rank of 2, at present.
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