SLM (SLM) has been removed from several Russell growth benchmarks, including the Russell 1000, 2500, 3000 and related growth indices. This shift can meaningfully influence index fund ownership and trading volumes.

Despite being dropped from several Russell growth indices, SLM's recent trading has been resilient, with a 7 day share price return of 14.32% and a 90 day share price return of 21.95%. This is set against a 1 year total shareholder return that is down 18.66% but up 69.15% over three years.

If this kind of index reshuffle has you reconsidering your watchlist, it could be a good moment to widen the lens and check out 20 top founder-led companies

So with SLM trading above its latest close of US$26.11 and compared to an analyst price target of US$28.82, alongside an estimated intrinsic value suggesting a wider discount, should you view this as potential mispricing or assume the market is already accounting for future growth?

Most Popular Narrative: 9.4% Undervalued

With SLM last closing at $26.11 against a narrative fair value of $28.82, the current setup frames a clear valuation gap for you to judge.

The recently enacted federal student loan reforms, which cap borrowing under Parent PLUS and eliminate Grad PLUS, are expected to shift $4.5–$5 billion in annual loan volume from the federal to the private market, directly expanding SLM's addressable market; this is poised to drive higher revenue growth beginning in 2027 as the impact phases in.

Want to see what underpins that higher fair value for SLM? The narrative leans on shrinking revenues, firm margins and a richer future earnings multiple that reshapes the long term earnings profile.

Result: Fair Value of $28.82 (UNDERVALUED)

However, SLM's story could change quickly if competition absorbs more of the federal loan shift than expected, or if credit losses climb and pressure margins.

Next Steps

Seen the mix of concerns and optimism around SLM and wondering where you land? Take a closer look at the numbers, weigh the trade offs yourself, and use the 2 key rewards and 3 important warning signs

Looking for more investment ideas beyond SLM?

If you are serious about sharpening your next move after reviewing SLM, do not stop here. Let fresh ideas from a structured stock screener guide you.

• Spot companies that combine quality with potential value by checking the 42 high quality undervalued stocks to see which stocks currently trade below their assessed worth.
• Build a steadier income stream by reviewing the 9 dividend fortresses and see which companies offer higher yields with a focus on durability.
• Prioritize capital protection by scanning the 72 resilient stocks with low risk scores to find stocks that score better on resilience and risk controls.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.