Why Is Navient (NAVI) Down 9% Since Last Earnings Report?

It has been about a month since the last earnings report for Navient (NAVI). Shares have lost about 9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Navient due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Navient Corporation before we dive into how investors and analysts have reacted as of late.

NAVI Q4 Earnings Top on Lower Expenses, NII Decline Y/Y

Navient reported fourth-quarter 2025 adjusted earnings per share (EPS) of 39 cents, surpassing the Zacks Consensus Estimate of 31 cents. It reported earnings of 25 cents in the prior-year quarter.

Results benefited from lower expenses and a slight decline in provisions for loan losses. However, a decrease in net interest income (NII) and other income acted as a headwind. Given the concern, NAVI shares lost nearly 10.8% in the early trading session. A full day’s trading session will depict a clearer picture.

Results included a 26 cents per share impact from provisions for loan losses, primarily reflecting the macroeconomic outlook and fourth-quarter delinquency trends in the legacy Private Education Loan portfolio, with a portion related to new originations. Additionally, there were regulatory and restructuring-related expenses of 11 cents per share. After considering these, GAAP net loss was $5 million against a net income of $24 million in the prior-year quarter.

For 2025, adjusted loss per share was 35 cents, wider than the Zacks Consensus Estimate of a loss of 6 cents per share. This compares unfavorably with the adjusted EPS of $2 reported in the prior year. The company reported a GAAP net loss of $80 million against a net income of $131 million reported in the prior year.

NII & Expenses Decline

NII declined 3.7% year over year to $129 million in the fourth quarter. It missed the Zacks Consensus Estimate by 3.3%.

In 2025, core NII was down 3.8% from the prior year to $551 million. Also, the top line missed the Zacks Consensus Estimate of $553.8 million.

Total other income decreased 48.3% year over year to $15 million.

Provision for loan losses was $44 million, down from $45 million in the prior-year quarter.

Total expenses decreased 34.2% year over year to $100 million.'

Quarterly Performance of Segments

Federal Education Loans: The segment generated a net income of $27 million, which rose significantly from the $10 million reported in the year-ago quarter.

As of Dec. 31, 2025, the company’s net FFELP loans were $28.1 billion, down 2.8% sequentially.

Consumer Lending: This segment reported a net income of $25 million, which decreased 32.4% from the year-ago quarter.

The private education loan delinquency rate greater than 30 days was 6.3% compared with 6.1% in the prior-year quarter.

As of Dec. 31, 2025, the company’s private education loans were $15.4 billion, which decreased marginally from the prior quarter. Navient originated $634 million of private education refinance loans in the reported quarter.

Business Processing: The company no longer provides Business Processing segment services after the sale of the government services business in February 2025.

Liquidity Position

Notably, the company had $637 million of total unrestricted cash and liquid investments as of Dec. 31, 2025.

Capital Distribution Activities

In the fourth quarter, the company paid $15 million in common stock dividends.
In the reported quarter, Navient repurchased shares of common stock for $26 million.

2026 Outlook

Core EPS is expected to be in the range of 65 cents to 80 cents. Net of incremental growth investments is expected to have a 35-cent to 40-cent impact on EPS.

Management expects full-year loan originations of $4 billion, representing an increase of more than 60% compared to 2025. The company expects both refinancing originations and in-school originations to be more than 50%.

Full Year 2026 total expenses are expected to be $350 million.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -8.63% due to these changes.

VGM Scores

Currently, Navient has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Navient has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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