Navient earnings: what to look for from NAVI

What happened

Navient will report quarterly results on Wednesday after market hours. Last quarter, revenue was $147 million, down 10.4% year on year, and the company beat analysts' revenue expectations. This quarter, the market expects revenue to decline 15.5% year on year.

Confirmed

Global impact / market context

Navient has missed Wall Street's revenue estimates several times over the past two years, so this report tests whether its business is steadying. A revenue decline of 15.5% would be smaller than the 62.6% drop a year earlier, which means the contraction may be slowing.

Analyst inference

Peer results give mixed signals. Sallie Mae's revenue fell 31.2% year on year, missing estimates by 18%, and its shares traded down 10.8%. SoFi's revenue rose 44.4%, beating estimates by 8.5%, and its shares were up 18.5%. Analysts have reconfirmed Navient estimates recently, suggesting they expect little change.

Analyst inference

What to watch

1. Watch whether Navient's quarterly revenue meets the market expectation of a 15.5% year-on-year decline, after last quarter's $147 million, which was down 10.4% and beat analysts' revenue expectations. Confirmed
2. Track whether Navient's revenue contraction continues to slow compared with the 62.6% decrease recorded in the same quarter last year, which would show the business is stabilizing. Proposed
3. Compare Navient's results with peer trends: Sallie Mae missed estimates and fell 10.8%, while SoFi beat estimates and rose 18.5%. A similar surprise could affect investor positioning in Navient shares. Analyst inference

Evidence

• stockstory.org