Choosing Between Navient Corporation (NAVI) and Enova International, Inc. (ENVA)

Navient Corporation (NASDAQ:NAVI) shares are up more than 4.88% this year and recently increased 2.12% or $0.29 to settle at $13.97. Enova International, Inc. (NYSE:ENVA), on the other hand, is up 9.54% year to date as of 01/11/2018. It currently trades at $16.65 and has returned 2.15% during the past week.

Navient Corporation (NASDAQ:NAVI) and Enova International, Inc. (NYSE:ENVA) are the two most active stocks in the Credit Services industry based on today’s trading volumes. Investor interest in the two stocks is clearly very high, but which is the better investment? To answer this question, we will compare the two companies across growth, profitability, risk, and valuation metrics, and also examine their analyst ratings and insider activity trends.


The ability to grow earnings at a compound rate over time is a crucial determinant of investment value. Analysts expect NAVI to grow earnings at a -2.34% annual rate over the next 5 years.

Profitability and Returns

Growth in and of itself is not necessarily valuable, and it can even be harmful to shareholders if companies overinvest in unprofitable projects in pursuit of that growth. We will use EBITDA margin and Return on Investment (ROI), which adjust for differences in capital structure, as measure of profitability and return. , compared to an EBITDA margin of 17.3% for Enova International, Inc. (ENVA). NAVI’s ROI is 0.60% while ENVA has a ROI of 11.00%. The interpretation is that ENVA’s business generates a higher return on investment than NAVI’s.

Cash Flow 

Cash is king when it comes to investing. On a percent-of-sales basis, NAVI’s free cash flow was 0% while ENVA converted 0.02% of its revenues into cash flow. This means that, for a given level of sales, ENVA is able to generate more free cash flow for investors.

Liquidity and Financial Risk

NAVI’s debt-to-equity ratio is 31.72 versus a D/E of 2.79 for ENVA. NAVI is therefore the more solvent of the two companies, and has lower financial risk.


NAVI trades at a forward P/E of 8.21, a P/B of 1.07, and a P/S of 2.57, compared to a forward P/E of 9.28, a P/B of 2.04, and a P/S of 0.65 for ENVA. Given that earnings are what matter most to investors, analysts tend to place a greater weight on the P/E.

Analyst Price Targets and Opinions

A cheap stock is not necessarily a value stock. Most of the time, a stock is cheap for good reason. A stock only has value if the current price is substantially below the price at which it should trade in the future. NAVI is currently priced at a -14.45% to its one-year price target of 16.33. Comparatively, ENVA is -12.37% relative to its price target of 19.00. This suggests that NAVI is the better investment over the next year.

The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.40 for NAVI and 1.40 for ENVA, which implies that analysts are more bullish on the outlook for NAVI.

Insider Activity and Investor Sentiment

The analysis of insider buying and selling trends can be extended to the aggregate level. Short interest, which represents the percentage of a stock’s tradable shares currently being shorted, captures what the market as a whole feels about a stock. NAVI has a short ratio of 3.55 compared to a short interest of 11.32 for ENVA. This implies that the market is currently less bearish on the outlook for NAVI.


Enova International, Inc. (NYSE:ENVA) beats Navient Corporation (NASDAQ:NAVI) on a total of 9 of the 14 factors compared between the two stocks. ENVA is more profitable, generates a higher return on investment, has higher cash flow per share, has a higher cash conversion rate, higher liquidity and has lower financial risk. Finally, NTAP has better sentiment signals based on short interest.

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