Nelnet (NNI) AI Stock Analysis

• Market Cap: $4.50B
• Dividend Yield: 0.92%
• Average Volume (3M): 72.36K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.68
• Revenue Growth: 6.46%
• EPS Growth: 116.26%
• Country: US
• Employees: 6,739
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 5.05
• Shares Outstanding: 25,515,182
• 10 Day Avg. Volume: 77,042
• 30 Day Avg. Volume: 72,355
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.54
• Enterprise Value/Revenue: 5.85
• Enterprise Value/Gross Profit: 8.71
• Enterprise Value/Ebitda: 17.68
• 1Y Price Target: $130.00
• Price Target Upside: 4.58% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: $144.00 ▲(15.84% Upside)

Nelnet's overall stock score reflects strong technical momentum and positive corporate events, which are offset by financial challenges such as high leverage and declining cash flow. The company's fair valuation and recent gains from investments further support a positive outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a robust business model and expanding market presence, supporting long-term financial health.

Profitability

High profit margins demonstrate efficient operations and strong pricing power, contributing to sustainable earnings.

Investment Gains

Significant gains from investments enhance financial flexibility and provide capital for strategic initiatives.

Negative Factors

High Leverage

Excessive leverage can increase financial risk and limit the company's ability to invest in growth opportunities.

Declining Cash Flow

Reduced cash flow growth may hinder the company's ability to fund operations and investments, impacting long-term viability.

Reduced Ownership in ALLO

Reduced ownership in ALLO could limit future income streams and influence over strategic decisions in this investment.

Nelnet Business Overview & Revenue Model

Company Description

Nelnet (NNI) is a diversified education services company based in the United States, primarily focused on providing student loan servicing, education-related financial services, and technology solutions. Its core operations include student loan origination and servicing, as well as offering various financial products and services tailored for educational institutions, students, and their families. The company also has a growing presence in the broadband and telecommunications sector, enhancing its portfolio of services aimed at supporting educational advancement.

How the Company Makes Money

Nelnet generates revenue through multiple streams, primarily from its student loan servicing operations, which include charging fees for managing and servicing federal and private student loans. Additionally, the company earns income from interest on loans it originates, as well as from investments in education-related ventures and technology solutions. Partnerships with educational institutions and government entities further contribute to its earnings, providing Nelnet with a stable client base and opportunities for expansion in the education finance sector. Moreover, Nelnet's involvement in broadband services offers an additional revenue stream, aligning with its mission to support education through enhanced access to technology.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.95B	1.85B	1.81B	1.82B	1.42B	1.04B
Gross Profit	1.31B	1.11B	961.15M	1.51B	1.25B	1.11B
EBITDA	646.28M	361.11M	214.11M	1.01B	775.12M	923.98M
Net Income	329.57M	184.04M	89.83M	407.35M	393.29M	352.44M
Balance Sheet
Total Assets	13.71B	13.78B	16.74B	19.37B	21.68B	22.65B
Cash, Cash Equivalents and Short-Term Investments	1.31B	1.18B	1.03B	2.14B	2.64B	1.46B
Total Debt	7.90B	8.31B	11.62B	14.64B	17.63B	19.32B
Total Liabilities	10.23B	10.48B	13.51B	16.17B	18.73B	20.02B
Stockholders Equity	3.57B	3.35B	3.26B	3.20B	2.95B	2.63B
Cash Flow
Free Cash Flow	52.29M	641.99M	358.92M	624.64M	485.92M	99.50M
Operating Cash Flow	490.50M	662.89M	432.98M	684.06M	544.87M	212.81M
Investing Cash Flow	1.30B	2.41B	1.94B	2.27B	1.19B	621.22M
Financing Cash Flow	-1.93B	-3.17B	-2.70B	-2.79B	-1.43B	-1.23B

Nelnet Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 124.31
• 50DMA: Negative
• 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 124.31 is below the 20-day moving average (MA) of 126.65, below the 50-day MA of 124.82, and above the 200-day MA of 114.31, indicating a neutral trend. The MACD of -0.23 indicates Positive momentum. The RSI at 45.84 is Neutral, neither overbought nor oversold. The STOCH value of 12.87 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	78 Outperform	2.92B	12.39	20.85%	―	23.42%	59.17%
OMF	76 Outperform	7.30B	11.11	19.93%	6.77%	9.41%	13.98%
NNI	74 Outperform	$4.50B	14.04	9.42%	0.92%	6.46%	116.26%
WU	70 Outperform	2.71B	3.17	96.42%	11.22%	-3.83%	62.05%
SLM	58 Neutral	5.81B	14.07	28.16%	1.87%	-4.34%	-38.01%
UPST	51 Neutral	6.44B	-877.85	-0.88%	―	60.62%	96.91%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Nelnet Corporate Events

Nelnet Gains $8M from Investee Equity Raise

Nelnet, Inc. has an equity investment in a third-party technology company. On August 11, 2025, this investee completed an equity raise, allowing Nelnet to redeem part of its investment for $10 million, recognizing an $8 million pre-tax gain. Additionally, due to the investee’s equity raise, Nelnet expects to recognize a further $22 million pre-tax gain in the third quarter of 2025, adjusting the carrying value of its remaining investment to reflect the new transaction value. This transaction leaves Nelnet with a remaining investment carrying amount of approximately $32 million.

Nelnet Bank Files Quarterly Call Report with FDIC

On July 29, 2025, Nelnet Bank, a subsidiary of Nelnet, Inc., filed its quarterly Consolidated Reports of Condition and Income for the period ending June 30, 2025, with the FDIC. This filing, known as the Call Report, is a regulatory requirement for banks with domestic offices and total assets under $5 billion, reflecting Nelnet Bank’s compliance with federal regulations.

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.

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.