As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the consumer finance industry, including Navient (NASDAQ:NAVI) and its peers.
Consumer finance companies provide loans and credit products to individuals. Growth drivers include increasing consumer spending, financial inclusion initiatives in developing markets, and digital lending platforms reducing distribution costs. Challenges include credit risk during economic downturns, regulatory scrutiny of lending practices, and intensifying competition from traditional banks and fintech firms offering innovative credit solutions.
The 20 consumer finance stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.2% while next quarter’s revenue guidance was 1.4% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Weakest Q2: Navient (NASDAQ:NAVI)
Spun off from Sallie Mae in 2014 to handle the company's loan servicing and collection operations, Navient (NASDAQ:NAVI) provides education loan servicing and business processing solutions that help manage federal student loans, private education loans, and government services.
Navient reported revenues of $164 million, down 31.4% year on year. This print fell short of analysts’ expectations by 1.5%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates.
Navient delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 4.4% since reporting and currently trades at $13.15.
Read our full report on Navient here, it’s free.
Best Q2: Nelnet (NYSE:NNI)
Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE:NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans.
Nelnet reported revenues of $516.1 million, up 61% year on year, outperforming analysts’ expectations by 36.2%. The business had an incredible quarter with a beat of analysts’ EPS estimates.
Nelnet pulled off the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $125.38.
Is now the time to buy Nelnet? Access our full analysis of the earnings results here, it’s free.
Sallie Mae (NASDAQ:SLM)
Originally created as a government-sponsored enterprise before privatizing in 2004, Sallie Mae (NASDAQ:SLM) is a financial services company that provides private education loans, savings products, and educational resources to help students and families pay for college.
Sallie Mae reported revenues of $403.6 million, down 21.5% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 15.2% since the results and currently trades at $27.13.
Read our full analysis of Sallie Mae’s results here.
Nubank (NYSE:NU)
With nearly 94 million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE:NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America.
Nubank reported revenues of $2.64 billion, up 20.8% year on year. This print topped analysts’ expectations by 1.3%. Overall, it was a satisfactory quarter as it also logged EPS in line with analysts’ estimates.
The stock is up 33.1% since reporting and currently trades at $15.97.
Read our full, actionable report on Nubank here, it’s free.
OneMain (NYSE:OMF)
Dating back to 1912 and formerly known as Springleaf, OneMain Holdings (NYSE:OMF) provides personal loans, auto financing, and credit cards to nonprime consumers who have limited access to traditional banking services.
OneMain reported revenues of $1.21 billion, up 10.2% year on year. This result surpassed analysts’ expectations by 1.7%. It was a very strong quarter as it also recorded an impressive beat of analysts’ yield estimates and a beat of analysts’ EPS estimates.
The stock is down 2.5% since reporting and currently trades at $57.18.
Read our full, actionable report on OneMain here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.