A month has gone by since the last earnings report for Synchrony (SYF Quick QuoteSYF - Free Report) . Shares have added about 5% in that time frame, outperforming the S&P 500.

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

Synchrony Q3 Earnings Beat Estimates on Improved Purchase Volume

Synchrony Financial reported third-quarter 2025 adjusted earnings per share (EPS) of $2.86, which surpassed the Zacks Consensus Estimate by 28.8%. The bottom line gained 47.4% year over year.

Net interest income was $4.7 billion, which grew 2.4% year over year. It surpassed the consensus mark by 0.6%.

The strong quarterly results benefited from improved purchase volume, net interest margin, increased interest and fees on loans in sales platforms like Digital and Health & Wellness, and an improved efficiency ratio. Reduced provision for credit losses also contributed to the upside. However, the upside was partly offset by declining overall loan receivables and average active accounts.

Synchrony’s Q3 Results in Detail

Retailer share arrangements of Synchrony advanced 12% year over year to $1 billion in the quarter under review. Total loan receivables of $100.2 billion slipped 2% year over year and missed the Zacks Consensus Estimate of $100.3 billion.

Total deposits dipped 2% year over year to $79.9 billion and fell short of our estimate of $83 billion. Provision for credit losses was $1.1 billion, which tumbled 28.2% year over year on the back of a reserve release. The metric came in lower than our estimate of $1.5 billion.

Synchrony’s purchase volume rose 2.3% year over year to $46 billion, driven by improved consumer spending and credit actions. The figure beat our estimate of $44.5 billion.

Interest and fees on loans totaled $5.5 billion, which inched down 0.2% year over year and missed our estimate by 0.4%. The metric was aided by an expanding loan receivables portfolio, partly offset by a decline in benchmark rates and late fee incidence. Net interest margin improved 58 basis points (bps) year over year to 15.6% in the third quarter, slightly higher than the Zacks Consensus Estimate of 15.4%.

Average active accounts of 68.3 million slipped 3% year over year and missed the Zacks Consensus Estimate and our estimate of 68.8 million.

Total other expenses of SYF increased 5% year over year to $1.2 billion and beat our estimate by 3.9%. The efficiency ratio of 32.6% improved 140 bps year over year and surpassed the consensus mark of 32.1%.

Movement in Individual Sales Platforms

Home & Auto period-end loan receivables decreased 6.3% year over year in the third quarter. Purchase volume tumbled 1.4% year over year due to lower average active accounts and reduced consumer spending in Home Specialty. Interest and fees on loans declined 2.4% year over year.

Digital period-end loan receivables rose 1.5% year over year. Purchase volume increased 5.2% year over year, driven by a rise in spend per account and a strong response from customers to improved product offerings and refreshed value propositions. Interest and fees on loans rose 2.4% year over year.

Diversified & Value period-end loan receivables inched up 0.2% year over year in the quarter under review. Purchase volume rose 2.8% year over year, driven by impressive retailer performance and an increase in out-of-partner spend. Interest and fees on loans decreased 1.4% year over year.

Health & Wellness period-end loan receivables inched up 0.1% year over year. Purchase volume rose 2.8% year over year, driven by increased spend per account and growth in Pet and Audiology. Interest and fees on loans advanced 1.2% year over year.

Lifestyle period-end loan receivables decreased 2.7% year over year in the third quarter. Purchase volume fell 2.8% year over year due to reduced spending in Outdoor and Specialty and lower average active accounts. Interest and fees on loans fell 2.2% year over year.

Synchrony’s Financial Position (As of Sept. 30, 2025)

Synchrony exited the third quarter with cash and equivalents of $16.2 billion, which climbed from the 2024-end level of $14.7 billion.

Total assets of $117 billion decreased from the figure of $119.5 billion at 2024-end.

Total borrowings were $14.4 billion, down from the figure of $15.5 billion as of Dec. 31, 2024.

Total equity of $17.1 billion increased from the 2024-end figure of $16.6 billion.

SYF’s balance sheet was consistently strong in the reported quarter, with total liquidity of $18.2 billion accounting for 15.6% of its total assets.

Return on assets increased 100 bps year over year to 3.6% in the third quarter. Return on equity was 25.1%, which improved 530 bps year over year.

Capital Deployment Update

Synchrony returned capital worth $861 million through share buybacks and paid common stock dividends of $110 million in the third quarter. In September, the company had approved an increase to its share repurchase authorization of $1 billion through June 30, 2026. As of Sept. 30, 2025, it had a leftover capacity of around $2.1 billion under its share buyback authorization for the period ending June 30, 2026.

Synchrony’s 2025 Guidance

Synchrony now anticipates remaining flat in period-end loan receivables. The company expects, consistent with improved credit performance, a shift in portfolio credit mix and the payment rate to be higher, which will affect purchase volume growth.

Net revenues are now expected to be between $15 billion and $15.1 billion, below the previously expected range of $15-$15.3 billion.

Management projects net charge-offs to be between 5.6% and 5.7% compared with the earlier guidance of 5.6-5.8% and to follow normal seasonal trends.

The efficiency ratio is now expected to stay between 33% and 33.5%, compared with the earlier guidance of 32-33%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Synchrony has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

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

Outlook

Synchrony has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.