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Navient (NAVI) to Report Q1 Earnings: What to Expect?
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Navient Corporation (NAVI - Free Report) is scheduled to report first-quarter 2024 results on Apr 24, before market open. NAVI’s quarterly revenues and earnings are anticipated to have declined from the year-ago reported level.
This Wilmington, DE-based lender’s fourth-quarter 2023 earnings missed the Zacks Consensus Estimate. Results were adversely impacted by a fall in total other income and core net interest income (NII). Further, a rise in expenses acted as a headwind.
NAVI has a mixed earnings surprise history. Navient’s earnings outpaced estimates in two of the trailing four quarters and missed twice, the average beat being 1.79%.
NAVI’s activities in the to-be-reported quarter were adequate to gain analysts’ confidence. As a result, the Zacks Consensus Estimate for first-quarter earnings of 58 cents per share has been revised marginally upward in the past week. However, the figure indicates a 45.3% decline from the year-ago reported figure.
The consensus estimate for revenues of $188 million indicates a decline of 26% from the year-ago reported number.
Key Factors to Note
Federal loan debt forgiveness related to school closures, which started in fourth-quarter 2023, continued in first-quarter 2024 as well. Also, the Federal Reserve paused interest rate hikes in first-quarter 2024. Though interest rates remained at a 22-year high of 5.25-5.5%, the deteriorated funding spread is expected to have limited NII growth and margins in the first quarter. As a result, revenues in the Federal Education Loans and Consumer Lending segments are likely to have decreased.
Nonetheless, per the Fed’s latest data, the demand for consumer loans showed improvement in the first quarter. This is expected to have driven loan origination for NAVI and offered some support to its NII.
The consensus estimate for NII is pegged at $180 million, suggesting a sequential rise of 12.5%.
Also, the Zacks Consensus Estimate for asset recovery and business processing revenues of $83 million indicates a 2.5% rise from the prior quarter’s reported figure. This is likely to have aided the Business Processing segment’s growth.
The consensus estimate for servicing revenues is pegged at $15.4 million, indicating a 3.5% fall from the prior quarter’s reported figure. The Zacks Consensus Estimate for other income of $5.59 million indicates a 6.8% fall from the prior quarter’s reported figure.
Overall, the Zacks Consensus Estimate for total fee income of $107 million indicates a rise of 72.5% from the prior quarter’s reported figure.
Lastly, Navient’s initiatives to become a technologically advanced company and its aim to expand services outside the education industry are expected to have led to elevated expenses in the quarter under review, affecting bottom-line growth.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Navient this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Navient is -0.07%.
Zacks Rank: Navient currently carries a Zacks Rank of 5 (Strong Sell).
Finance Stocks Worth a Look
Here are a couple of finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
The Earnings ESP for Invesco (IVZ - Free Report) is +0.24% and it carries a Zacks Rank #2 at present. The company is slated to report first-quarter 2024 results on Apr 23.
Over the past 30 days, the Zacks Consensus Estimate for IVZ’s quarterly earnings has moved 5.3% north to 40 cents per share.
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Navient (NAVI) to Report Q1 Earnings: What to Expect?
Navient Corporation (NAVI - Free Report) is scheduled to report first-quarter 2024 results on Apr 24, before market open. NAVI’s quarterly revenues and earnings are anticipated to have declined from the year-ago reported level.
This Wilmington, DE-based lender’s fourth-quarter 2023 earnings missed the Zacks Consensus Estimate. Results were adversely impacted by a fall in total other income and core net interest income (NII). Further, a rise in expenses acted as a headwind.
NAVI has a mixed earnings surprise history. Navient’s earnings outpaced estimates in two of the trailing four quarters and missed twice, the average beat being 1.79%.
Navient Corporation Price and EPS Surprise
Navient Corporation price-eps-surprise | Navient Corporation Quote
NAVI’s activities in the to-be-reported quarter were adequate to gain analysts’ confidence. As a result, the Zacks Consensus Estimate for first-quarter earnings of 58 cents per share has been revised marginally upward in the past week. However, the figure indicates a 45.3% decline from the year-ago reported figure.
The consensus estimate for revenues of $188 million indicates a decline of 26% from the year-ago reported number.
Key Factors to Note
Federal loan debt forgiveness related to school closures, which started in fourth-quarter 2023, continued in first-quarter 2024 as well. Also, the Federal Reserve paused interest rate hikes in first-quarter 2024. Though interest rates remained at a 22-year high of 5.25-5.5%, the deteriorated funding spread is expected to have limited NII growth and margins in the first quarter. As a result, revenues in the Federal Education Loans and Consumer Lending segments are likely to have decreased.
Nonetheless, per the Fed’s latest data, the demand for consumer loans showed improvement in the first quarter. This is expected to have driven loan origination for NAVI and offered some support to its NII.
The consensus estimate for NII is pegged at $180 million, suggesting a sequential rise of 12.5%.
Also, the Zacks Consensus Estimate for asset recovery and business processing revenues of $83 million indicates a 2.5% rise from the prior quarter’s reported figure. This is likely to have aided the Business Processing segment’s growth.
The consensus estimate for servicing revenues is pegged at $15.4 million, indicating a 3.5% fall from the prior quarter’s reported figure. The Zacks Consensus Estimate for other income of $5.59 million indicates a 6.8% fall from the prior quarter’s reported figure.
Overall, the Zacks Consensus Estimate for total fee income of $107 million indicates a rise of 72.5% from the prior quarter’s reported figure.
Lastly, Navient’s initiatives to become a technologically advanced company and its aim to expand services outside the education industry are expected to have led to elevated expenses in the quarter under review, affecting bottom-line growth.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Navient this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Navient is -0.07%.
Zacks Rank: Navient currently carries a Zacks Rank of 5 (Strong Sell).
Finance Stocks Worth a Look
Here are a couple of finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
The Earnings ESP for Invesco (IVZ - Free Report) is +0.24% and it carries a Zacks Rank #2 at present. The company is slated to report first-quarter 2024 results on Apr 23.
Over the past 30 days, the Zacks Consensus Estimate for IVZ’s quarterly earnings has moved 5.3% north to 40 cents per share.
SEI Investments (SEIC - Free Report) is scheduled to release quarterly numbers on Apr 24. The company, which sports a Zacks Rank #1 at present, has an Earnings ESP of +2.50%. You can see the complete list of today’s Zacks #1 Rank stocks here.
SEIC’s quarterly earnings estimates have been revised 1% upward to 97 cents over the past month.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.