NAVI - Navient trades higher after Q2 results raises FY22 non-GAAP EPS guidance

Student loan company Navient ( NAVI ), currently trading ~10% higher after Q2 earnings beat, raised its FY22 non-GAAP EPS guidance to a range of $3.35 to $3.45.

Consensus EPS estimate stands at $3.22.

For Q2, Non-GAAP EPS of $0.92 beats by $0.14, while net interest income of $321M (-0.3% Y/Y) beats by $69.8M.

Q4'21 earnings trailed the consensus estimate by a wide margin as net income from its federal education loans and consumer lending segments fell from year-ago levels.

2022 did not start well for Navient, with the company agreeing to cancel loan balances of ~66,000 borrowers, amounting to ~$1.7B, with certain private education loans to settle lawsuits by 39 state attorneys general.

Additionally, President Biden extended the pause on student loan payments until Aug. 31, a news which led to the share prices of NAVI decline.

J.P. Morgan Analyst Richard Shane downgraded the company to Underweight from Neutral, saying the extended student loan payments pause "limits consolidation opportunity and the company's long-term growth drivers remain unclear."

The Q2 earnings beat has, however, increased the optimism surrounding NAVI financial results.

Here is a look at the company's EPS estimates and surprises by quarter:

For further details see: