Nelnet (NNI) AI Stock Analysis

• Market Cap: $4.66B
• Dividend Yield: 0.91%
• Average Volume (3M): 116.35K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.63
• Revenue Growth: 9.14%
• EPS Growth: 291.99%
• Country: US
• Employees: 6,739
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 2.95
• Shares Outstanding: 25,316,448
• 10 Day Avg. Volume: 130,818
• 30 Day Avg. Volume: 116,350
• PEG Ratio: 0.19
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 2.12
• P/FCF Ratio: 6.10
• Enterprise Value/Market Cap: 2.48
• Enterprise Value/Revenue: 5.75
• Enterprise Value/Gross Profit: 8.04
• Enterprise Value/Ebitda: 17.67
• 1Y Price Target: $135.00
• Price Target Upside: 1.41% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 6.53
• Revenue Forecast (FY): $1.50B

• Rating: 78 Outperform
• Price Target: $147.00 ▲(10.43% Upside)

Nelnet's strong financial performance and strategic acquisition drive the overall score. While technical indicators and valuation are neutral, the acquisition enhances growth prospects. High debt levels and declining operating cash flow are risks to monitor.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective business model in the education and financial services sector.

Strategic Acquisition

The acquisition expands Nelnet's capabilities and market reach in Canada, aligning with its growth strategy in the education sector.

Cash Generation

Strong cash generation supports financial health, providing flexibility for investments and debt management.

Negative Factors

High Debt Levels

High debt levels can limit financial flexibility and pose risks if not managed properly, impacting long-term stability.

Declining Operating Cash Flow

Decreasing operating cash flow may strain liquidity, affecting the company's ability to meet short-term obligations and invest in growth.

Net Profit Margin Pressure

Pressure on net profit margins suggests challenges in maintaining profitability, which could impact future earnings.

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 of income is derived from its student loan servicing operations, where it manages federal and private student loans for various lenders and educational institutions, earning servicing fees. Additionally, Nelnet earns interest income from its own loan portfolio, which includes private student loans. The company also generates revenue from technology services provided to educational institutions, including payment processing solutions and enterprise resource management systems. Partnerships with educational institutions and loan originators enhance its service offerings and expand its market reach. Furthermore, Nelnet's strategic investments in technology and education-related ventures contribute to its earnings by diversifying its revenue base and creating new business opportunities.

Nelnet Financial Statement Overview

Summary

Nelnet exhibits strong financial performance with solid profitability and cash generation. The income statement shows strong profitability with a TTM gross profit margin of 61.69% and a net profit margin of 25.17%. The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 2.14, showing improvement. Cash flow highlights robust free cash flow growth of 278.5%. However, high debt levels remain a potential risk.

Income Statement

Nelnet's income statement shows strong profitability with a TTM gross profit margin of 61.69% and a net profit margin of 25.17%. The company has demonstrated consistent revenue growth, with a TTM revenue growth rate of 6.19%. EBIT and EBITDA margins have also improved significantly, indicating efficient operations. However, the net profit margin has decreased compared to previous years, suggesting some pressure on net earnings.

Balance Sheet

The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 2.14 in the TTM period, showing improvement from previous years. Return on equity is healthy at 12.40%, indicating effective use of equity. However, the high level of debt remains a concern, which could pose risks if not managed properly.

Cash Flow

Nelnet's cash flow statement highlights robust free cash flow growth of 278.5% in the TTM period, showcasing strong cash generation capabilities. The free cash flow to net income ratio is 1.10, indicating efficient conversion of earnings into cash. However, the operating cash flow has decreased, which could impact liquidity if the trend continues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.01B	1.85B	1.81B	1.82B	1.42B	1.37B
Gross Profit	1.44B	1.11B	961.15M	1.35B	1.25B	979.20M
EBITDA	653.16M	361.11M	214.11M	678.09M	634.43M	648.96M
Net Income	433.86M	184.04M	89.83M	406.90M	393.29M	352.44M
Balance Sheet
Total Assets	13.88B	13.78B	16.71B	19.37B	21.68B	22.65B
Cash, Cash Equivalents and Short-Term Investments	1.37B	1.18B	1.11B	1.51B	1.06B	469.86M
Total Debt	7.82B	8.31B	11.83B	14.64B	17.65B	19.34B
Total Liabilities	10.29B	10.48B	13.51B	16.17B	18.73B	20.02B
Stockholders Equity	3.65B	3.35B	3.25B	3.20B	2.95B	2.63B
Cash Flow
Free Cash Flow	464.54M	641.99M	358.92M	624.64M	421.38M	235.79M
Operating Cash Flow	465.90M	662.89M	432.98M	684.06M	480.33M	349.10M
Investing Cash Flow	853.91M	2.41B	1.94B	2.27B	1.19B	621.22M
Financing Cash Flow	-1.45B	-3.17B	-2.70B	-2.79B	-1.43B	-1.23B

Nelnet Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 133.12
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 133.12 is above the 20-day moving average (MA) of 128.98, above the 50-day MA of 129.28, and above the 200-day MA of 120.36, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 59.17 is Neutral, neither overbought nor oversold. The STOCH value of 52.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NNI.

Nelnet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NNI	78 Outperform	$4.66B	11.10	12.27%	0.91%	9.14%	291.99%
BFH	72 Outperform	$3.35B	7.48	14.81%	1.16%	-4.32%	58.34%
ENVA	71 Outperform	$3.40B	12.99	23.81%	―	21.10%	76.12%
CACC	71 Outperform	$4.74B	11.38	28.14%	―	10.30%	154.64%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SLM	67 Neutral	$5.33B	9.24	27.85%	1.90%	0.59%	-1.11%
NAVI	55 Neutral	$1.21B	―	-1.95%	4.94%	-25.22%	-174.34%

Nelnet Corporate Events

Nelnet Bank Releases Q3 2025 Financial Report

On October 29, 2025, Nelnet Bank filed its Consolidated Reports of Condition and Income for the quarter ended September 30, 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 standing, impacting its operations and transparency with stakeholders.

Nelnet Subsidiary Acquires Finastra’s Canadian Loan Business

On October 23, 2025, Nelnet, Inc. announced that its subsidiary, Nelnet Canada, entered into a definitive agreement to acquire Finastra’s Canadian student loan servicing business for CAD $130 million. This acquisition, expected to close in the first quarter of 2026, will enhance Nelnet’s presence in the Canadian market by leveraging Finastra’s established servicing solutions for 2.4 million borrowers. The move aligns with Nelnet’s strategy to expand its loan servicing capabilities and support its mission in the education sector, while maintaining independent operations in Canada.