Nelnet (NNI) AI Stock Analysis

• Market Cap: $4.35B
• Dividend Yield: 0.93%
• Average Volume (3M): 83.36K
• Price to Earnings (P/E): 23.1
• Beta (1Y): 0.68
• Revenue Growth: -2.56%
• EPS Growth: 43.22%
• Country: US
• Employees: 6,739
• Sector: Financial
• Sector Strength: 77
• Industry: Financial - Credit Services
• EPS (TTM): 2.39
• Shares Outstanding: 25,695,791
• 10 Day Avg. Volume: 96,755
• 30 Day Avg. Volume: 83,356
• PEG Ratio: 4.08
• Price to Book (P/B): 1.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 45.21
• Enterprise Value/Market Cap: 2.97
• Enterprise Value/Revenue: 1.87
• Enterprise Value/Gross Profit: 11.49
• Enterprise Value/Ebitda: 5.21
• 1Y Price Target: $130.00
• Price Target Upside: 8.28% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 73 Outperform
• Price Target: $132.00 ▲(9.95%Upside)

Nelnet's strong financial performance and technical indicators indicate potential growth, boosted by recent corporate gains. However, high leverage and valuation concerns limit upside potential.

Positive Factors

Financial Performance

Better net interest income and lower expenses boost analyst's estimates.

Growth Opportunities

Nelnet significantly increased its loan acquisitions, creating new opportunities for growth.

Investment Opportunities

The recent financing transaction involving ALLO generated significant cash for Nelnet, providing further investment opportunities.

Negative Factors

Tariff Impact

Tariff-related uncertainty has weighed on the solar segment, leading to delayed projects and reduced revenue.

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 servicing of student loans, where the company earns fees for managing and collecting payments on behalf of the federal government and private lenders. Additionally, Nelnet's payment processing services for educational institutions and other clients contribute significantly to its earnings. The company also invests in and manages a portfolio of renewable energy projects, generating income through tax credits and energy sales. Furthermore, Nelnet's telecommunications division provides broadband services, adding another layer of revenue. Partnerships with educational institutions and government agencies play a crucial role in sustaining and growing these revenue streams.

Nelnet Financial Statement Overview

Summary

Nelnet demonstrates strong profitability with solid operational margins and effective cash flow management. However, the decline in revenue and high leverage are potential areas of concern.

Income Statement

Nelnet's income statement shows strong profitability with a gross profit margin of approximately 62.7% and a net profit margin of 10.8% in TTM. The company has displayed a solid EBIT margin of 14.4% and an impressive EBITDA margin of 35.4%, indicating robust operational efficiency. However, the revenue has slightly declined by 2.7% from the previous year, which may pose a risk if this trend continues.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 2.53, indicating significant leverage which could increase financial risk, particularly in volatile market conditions. The equity ratio stands at 24.1%, suggesting a moderate level of financial stability. Return on equity is strong at 5.7%, showcasing effective use of equity to generate profits.

Cash Flow

Free cash flow increased significantly by 51.1% in TTM, demonstrating effective cash flow management. The operating cash flow to net income ratio is 0.31, and the free cash flow to net income ratio is 0.50, indicating healthy cash generation relative to net income. However, the lower operating cash flow compared to prior periods may need monitoring.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.85B	1.81B	1.82B	1.42B	1.04B
Gross Profit	1.11B	961.15M	1.51B	1.25B	1.11B
EBITDA	361.11M	214.11M	1.01B	775.12M	923.98M
Net Income	184.04M	89.83M	407.35M	393.29M	352.44M
Balance Sheet
Total Assets	13.78B	16.74B	19.37B	21.68B	22.65B
Cash, Cash Equivalents and Short-Term Investments	1.18B	1.03B	2.14B	2.64B	1.46B
Total Debt	8.31B	11.62B	14.64B	17.63B	19.32B
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	-1.43B	-1.23B

Nelnet Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 120.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 120.06 is below the 20-day moving average (MA) of 120.52, above the 50-day MA of 116.90, and above the 200-day MA of 111.61, indicating a neutral trend. The MACD of 1.52 indicates Positive momentum. The RSI at 51.88 is Neutral, neither overbought nor oversold. The STOCH value of 10.81 is Positive, 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	83 Outperform	$2.88B	13.53	19.94%	―	24.47%	54.18%
NNI	73 Outperform	$4.35B	23.11	5.64%	0.93%	-2.56%	43.22%
Sector *	69 Neutral	€15.15B	11.86	14.88%	6.03%	7.26%	0.13%
OMF	68 Neutral	$6.81B	12.18	17.46%	7.23%	9.07%	―
SLM	66 Neutral	$6.86B	11.94	27.60%	1.57%	-0.70%	-12.72%
WU	66 Neutral	$2.68B	3.01	136.84%	11.60%	-5.16%	59.60%
UPST	66 Neutral	$7.32B	―	-10.30%	―	34.69%	63.65%

Nelnet Corporate Events

Nelnet Gains $175M from ALLO Holdings Redemption

On June 4, 2025, Nelnet, Inc., a company involved in financial services, received $411 million from redeeming certain membership interests in ALLO Holdings LLC. This transaction resulted in a pre-tax gain of $175 million for Nelnet. Following the redemption, Nelnet’s ownership in ALLO decreased from 45% to 27%, and the company no longer holds any preferred membership interests in ALLO.

The most recent analyst rating on (NNI) stock is a Hold with a $115.00 price target. To see the full list of analyst forecasts on Nelnet stock, see the NNI Stock Forecast page.

Nelnet Holds 2025 Annual Shareholder Meeting

Nelnet, Inc. held its 2025 annual meeting of shareholders on May 15, 2025, where several key proposals were voted on. Shareholders elected three Class II directors, ratified KPMG LLP as the independent public accounting firm for 2025, and approved executive compensation. These decisions reflect the company’s ongoing governance and operational strategies, potentially impacting its market positioning and stakeholder relations.

The most recent analyst rating on (NNI) stock is a Hold with a $106.00 price target. To see the full list of analyst forecasts on Nelnet stock, see the NNI Stock Forecast page.

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.