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"We rate NAVIENT CORP (NAVI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and feeble growth in the company's earnings per share."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $555.00 million or 30.58% when compared to the same quarter last year. In addition, NAVIENT CORP has also vastly surpassed the industry average cash flow growth rate of -38.82%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Consumer Finance industry. The net income has significantly decreased by 43.5% when compared to the same quarter one year ago, falling from $543.00 million to $307.00 million.
- The debt-to-equity ratio is very high at 33.88 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- You can view the full analysis from the report here: NAVI Ratings Report
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