Nelnet (NNI) AI Stock Analysis

• Market Cap: $3.93B
• Dividend Yield: 1.04%
• Average Volume (3M): 59.99K
• Price to Earnings (P/E): 21.9
• Beta (1Y): 0.65
• Revenue Growth: -0.43%
• EPS Growth: 105.05%
• Country: US
• Employees: 6,739
• Sector: Financial
• Sector Strength: 85
• Industry: Financial - Credit Services
• EPS (TTM): 4.90
• Shares Outstanding: 25,703,360
• 10 Day Avg. Volume: 55,752
• 30 Day Avg. Volume: 59,991
• PEG Ratio: 0.21
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.86
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 9.63
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $115.00
• Price Target Upside: 7.68% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

Nelnet's overall stock score reflects its stable financial performance and effective cash flow management, despite recent revenue declines. The moderate P/E ratio and dividend yield suggest a fair valuation, while technical indicators present mixed signals, pointing to potential short-term volatility. The absence of recent earnings call data and corporate events limits insights into future prospects, but the company appears fundamentally sound with improved balance sheet metrics.

Positive Factors

Capital Deployment

Nelnet Financial Services will be a key area of focus for capital deployment, with plans to deploy approximately $800 million of capital, and Nelnet Bank targeting around 30% growth.

Cost Management

The quarter is viewed as positive, driven by strong servicing revenue, better net interest margin, and lower-than-expected expenses.

Revenue Growth

Revenue should continue to grow, driven by margin improvement and the new SoFi servicing.

Negative Factors

Expense Management

Management expects a reduction in such expenses moving forward after incurring a significant portion of these expenses this quarter.

Investment Losses

NNI recorded $11.3mm net losses from tax equity solar investments.

Loan Defaults

NNI experienced higher defaults within some of these securitizations, leading to a recorded impairment of $29mm.

Nelnet Business Overview & Revenue Model

Company Description

Nelnet, Inc. engages in loan servicing, communications, education technology, services, and payment processing businesses worldwide. The Loan Servicing and Systems segment provides loan conversion, application processing, borrower updates, customer service, payment processing, due diligence procedures, funds management reconciliation, and claim processing services. This segment also provides student loan servicing software; business process outsourcing services specialized in contact center management, such as inbound calls, outreach campaigns and sales, and interacting with customers through multi-channels. The Education Technology, Services, and Payment Processing segment offers financial management services; school information system software; website design and cost effective admissions software; FACTS Giving, a donation platform; and customized professional development and coaching services, educational instruction services, and technology products that aid in teacher and student evaluations. It also offers tuition payment plans, and service and technology for student billings, payments, and refunds; solutions for in-person, online, and mobile payment experiences on campus; payment processing services, such as credit card and electronic transfer; faith community engagement, giving management, and learning management services and technologies; and an integrated commerce payment platform, financial management, and tuition payment plan services, as well as a school management platform that provides administrative, information management, financial management, and communication functions for K-12 schools. The Communications segment provides fiber optic service to homes and businesses for internet, television, and telephone services. The Asset Generation and Management segment acquires, manages, and owns loan assets. The Nelnet Bank segment operates internet industrial banks. The company was founded in 1978 and is headquartered in Lincoln, Nebraska.

How the Company Makes Money

Nelnet generates revenue through several key streams. The primary source is its loan servicing segment, where it manages and services a large portfolio of federal student loans on behalf of the U.S. Department of Education. This includes earning fees for loan servicing activities such as payment processing and customer service. Additionally, Nelnet earns revenue through its payment processing solutions, which facilitate transactions for educational institutions, and its education technology services that offer planning and financial management tools for students and families. The company also invests in various ventures and holds a portfolio of real estate and renewable energy investments, contributing to its earnings. Strategic partnerships with educational institutions and financial organizations further bolster its revenue streams.

Nelnet Financial Statement Overview

Summary

Nelnet demonstrated resilience in 2024 despite a revenue decline, with improved profitability and cash flow metrics. The company exhibited strong cost control measures, resulting in higher net income. Leverage ratios improved, indicating better balance sheet management. However, the absence of EBIT and EBITDA data for 2024 limits a full evaluation of operational efficiency. Overall, the company appears to be on a stable financial footing with effective cash flow management, though long-term asset growth remains a concern.

Income Statement

Nelnet showed a significant decline in total revenue from 2023 to 2024, with a decrease from $2.13 billion to $1.17 billion. However, despite the revenue drop, the net income improved substantially from $91.53 million in 2023 to $184.05 million in 2024, indicating effective cost control and operational efficiency. The gross profit margin remained strong at 100% in 2024 due to the absence of cost of goods sold, typical for the finance industry. EBIT and EBITDA figures were not reported for 2024, limiting detailed profitability analysis.

Balance Sheet

The company's debt-to-equity ratio decreased from 3.56 in 2023 to 2.48 in 2024, suggesting improved leverage management. Stockholders' equity increased slightly, and the equity ratio improved from 19.49% to 24.31%, reflecting enhanced financial stability. However, total assets declined, which may affect long-term growth potential.

Cash Flow

Nelnet's free cash flow grew significantly from $358.92 million in 2023 to $641.99 million in 2024, indicating robust cash generation capacity. Operating cash flow increased sharply, and the operating cash flow to net income ratio improved, showcasing efficient cash management. The free cash flow to net income ratio also strengthened, highlighting strong cash conversion.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.17B	2.13B	1.41B	1.23B	1.06B
	Gross Profit
1.17B	585.03M	816.28M	725.25M	559.25M
	EBIT
0.00	943.60M	950.71M	509.11M	453.30M
	EBITDA
0.00	1.02B	1.01B	775.12M	923.98M
	Net Income Common Stockholders
184.04M	91.53M	407.35M	393.29M	352.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.18B	1.03B	2.14B	2.64B	1.46B
	Total Assets
13.78B	16.74B	19.37B	21.68B	22.65B
	Total Debt
8.31B	11.62B	14.64B	17.63B	19.32B
	Net Debt
8.12B	11.45B	12.41B	15.92B	18.21B
	Total Liabilities
10.48B	13.51B	16.17B	18.73B	20.02B
	Stockholders Equity
3.35B	3.26B	3.20B	2.95B	2.63B
Cash Flow		Free Cash Flow
641.99M	358.92M	624.64M	485.92M	99.50M
	Operating Cash Flow
662.89M	432.98M	684.06M	544.87M	212.81M
	Investing Cash Flow
2.41B	1.94B	2.27B	1.19B	621.22M
	Financing Cash Flow
-3.17B	-2.70B	-2.79B	-1.49B	-1.10B

Nelnet Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 106.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NNI, the sentiment is Neutral. The current price of 106.8 is above the 20-day moving average (MA) of 105.28, below the 50-day MA of 110.62, and below the 200-day MA of 110.16, indicating a neutral trend. The MACD of -0.83 indicates Negative momentum. The RSI at 51.85 is Neutral, neither overbought nor oversold. The STOCH value of 47.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NNI.

Nelnet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENVA	80 Outperform	$2.41B	11.17	19.94%	―	24.47%	54.18%
WU	72 Outperform	$3.21B	3.61	136.84%	9.67%	-5.16%	59.60%
OMF	68 Neutral	$5.89B	10.45	17.46%	8.43%	9.07%	―
NNI	66 Neutral	$3.93B	21.95	5.45%	1.04%	-0.43%	105.05%
SLM	66 Neutral	$6.55B	11.23	27.60%	1.54%	-0.70%	-12.72%
Sector *	64 Neutral	$12.61B	9.79	7.95%	16985.69%	12.77%	-3.98%
UPST	53 Neutral	$4.76B	―	-20.27%	―	24.50%	49.38%

Nelnet Corporate Events

Nelnet Bank Files Q1 2025 Call Report

On April 29, 2025, Nelnet Bank filed its Consolidated Reports of Condition and Income for the quarter ended March 31, 2025, with the FDIC. This filing, known as the Call Report, is publicly accessible on the FDIC’s website and reflects Nelnet Bank’s financial condition and income for the specified period.

Spark’s Take on NNI Stock

According to Spark, TipRanks’ AI Analyst, NNI is a Neutral.

Nelnet’s strong financial performance, marked by improved profitability and effective cash management, is a key strength. However, technical indicators suggest a bearish trend and weak market momentum, which could hinder short-term stock performance. The valuation appears fair but does not provide a strong incentive for investment. The absence of significant earnings call and corporate events data makes the financial performance and technical analysis the primary factors affecting the score.

To see Spark’s full report on NNI stock, click here.