What Happened?
Shares of student loan servicer Navient (NASDAQ: NAVI) fell 10.9% in the afternoon session after the company reported disappointing third-quarter financial results, missing Wall Street's earnings and revenue estimates. Navient disclosed a third-quarter GAAP loss of $0.87 per share, a significant miss compared to the analyst expectation of a $0.17 profit. This marked a shortfall of $1.04 per share. Furthermore, the company's revenue for the period came in at $161 million, slightly below the consensus forecast of $162.8 million. The failure to meet expectations on both key financial metrics indicated a weaker performance than the market had anticipated, prompting a negative reaction from investors.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Navient? Access our full analysis report here.
What Is The Market Telling Us
Navient’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for Navient and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 4.5% after the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Navient is down 10.7% since the beginning of the year, and at $11.66 per share, it is trading 25.9% below its 52-week high of $15.73 from November 2024. Investors who bought $1,000 worth of Navient’s shares 5 years ago would now be looking at an investment worth $1,428.
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