It is becoming abundantly clear that the Biden administration is uninterested in providing free college for our country’s knowledge-hungry youngsters. Even if the Biden administration were to forgive $10,000 of student loans per borrower, NAVI would still be on solid financial footing considering the cost of college continues to skyrocket and most borrowers have significantly more than $10,000 in student loan debt.
Aside from the United States’ unwillingness to provide free postsecondary education, NAVI is also favorable for additional reasons. Let’s take a look at why NAVI will gradually attracting more investor interest with each passing day.
NAVI’s six-month chart is impressive to say the least. The stock was trading around $8 in September of 2020. NAVI has gradually increased, moving up to $14. In fact, the stock is right back at its pre-COVID trading level. It is clear investors are bullish on NAVI, assuming the pause in student loan payment requirements will be lifted within a reasonable period of time as the economy returns to normal.
Though NAVI is currently priced slightly below its 52-week high, it still has a low forward P/E ratio of 4.36. This is one of the lowest forward P/E ratios you will ever find. Furthermore, NAVI has a fantastic dividend of 4.62%. This dividend will likely prove quite safe across posterity as Americans clearly do not have an appetite for student loan forgiveness or even no-cost college.
NAVI is expected to deliver quarterly earnings around 77 cents per share. This figure is a 51% hike on a year over year basis. NAVI revenues will likely top the $302 million mark, representing nearly a 2% increase from the same quarter one year ago.
Aside from student loans, NAVI also generates revenue by providing business services to 500+ healthcare and government organizations. These services range from consulting to general business office support, risk management and expense management. In fact, NAVI even helps state governments handle unemployment claims. This means if college enrollment across the United States continues to decline, NAVI will still be able to drive revenue in other areas.
The Analysts’ Take On NAVI
The analysts think highly of NAVI, setting an average target price of $13.69. If NAVI reaches this level, it will have popped by more than 6%. The highest target price for the stock is $16 while the lowest target price is $11.50. Of the 10 analysts who have issued recommendations for NAVI, four consider it a Strong Buy, two consider it a Buy and four consider it a Hold. No analysts consider NAVI to be a Sell or Strong Sell.
NAVI’s POWR Ratings
NAVI has a B POWR Rating meaning it is a Buy. NAVI has B grades in the Momentum and Value components of the POWR Ratings. Click here to learn how NAVI fares in the Quality, Growth, Sentiment and Stability components of the POWR Ratings.
Of the 103 publicly traded companies in the Financial Services (Enterprise) category, NAVI is ranked 10th. You can learn more about the publicly traded companies in the Financial Services (Enterprise) category by clicking here.
NAVI is Worthy of Your Investing Dollars Right Now
NAVI’s loan forbearance rate declined to 13.8% on federal loans and a mere 3.9% on private loans. The company’s borrower delinquency rated also dropped, falling all the way to 2.6% for private loans and around 9% for federal loans. Both of these figures are lower than those NAVI posted in tthe year prior.
Add in the fact that NAVI’s charge-off rate declined from 1.67% to a mere 0.88% on private loans and investors have even more reason to be bullish on the stock. In short, NAVI is a value stock with a solid forward P/E ratio and a bright future. Take advantage of the fact that NAVI is trading at a discount, add some shares to your portfolio and collect your annual 4.62% dividend with a smile.
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NAVI shares were trading at $14.42 per share on Wednesday afternoon, up $0.08 (+0.56%). Year-to-date, NAVI has gained 48.72%, versus a 6.65% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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