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Nelnet Inc (NNI)
NYSE:NNI
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Nelnet (NNI) AI Stock Analysis

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NNI

Nelnet

(NYSE:NNI)

Rating:74Outperform
Price Target:
$144.00
▲(11.35% 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
Financial Strategy
The recent financing transaction involving ALLO generated significant cash for Nelnet, providing further investment opportunities.
Future Performance
Management is seeking ways to cap solar losses, which could positively impact future performance.
Growth Opportunities
Nelnet significantly increased its loan acquisitions, creating new opportunities for growth.
Negative Factors
Earnings
Earnings per share came in below the analyst's estimate due to weaker revenue and elevated solar losses.
Revenue Challenges
Tariff-related uncertainty has weighed on the solar segment, leading to delayed projects and reduced revenue.
Solar Segment
Solar continues to weigh on earnings, with a significant loss this quarter driven by cost overruns on some projects.

Nelnet (NNI) vs. SPDR S&P 500 ETF (SPY)

Nelnet Business Overview & Revenue Model

Company DescriptionNelnet, 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 MoneyNelnet 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
78
Positive
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
65
Positive
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
72
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.95B1.85B1.81B1.82B1.42B1.04B
Gross Profit1.31B1.11B961.15M1.51B1.25B1.11B
EBITDA646.28M361.11M214.11M1.01B775.12M923.98M
Net Income329.57M184.04M89.83M407.35M393.29M352.44M
Balance Sheet
Total Assets13.71B13.78B16.74B19.37B21.68B22.65B
Cash, Cash Equivalents and Short-Term Investments1.31B1.18B1.03B2.14B2.64B1.46B
Total Debt7.90B8.31B11.62B14.64B17.63B19.32B
Total Liabilities10.23B10.48B13.51B16.17B18.73B20.02B
Stockholders Equity3.57B3.35B3.26B3.20B2.95B2.63B
Cash Flow
Free Cash Flow52.29M641.99M358.92M624.64M485.92M99.50M
Operating Cash Flow490.50M662.89M432.98M684.06M544.87M212.81M
Investing Cash Flow1.30B2.41B1.94B2.27B1.19B621.22M
Financing Cash Flow-1.93B-3.17B-2.70B-2.79B-1.43B-1.23B

Nelnet Technical Analysis

Technical Analysis Sentiment
Positive
Last Price129.32
Price Trends
50DMA
122.82
Positive
100DMA
116.63
Positive
200DMA
113.42
Positive
Market Momentum
MACD
1.70
Negative
RSI
61.46
Neutral
STOCH
81.38
Negative
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 129.32 is above the 20-day moving average (MA) of 126.21, above the 50-day MA of 122.82, and above the 200-day MA of 113.42, indicating a bullish trend. The MACD of 1.70 indicates Negative momentum. The RSI at 61.46 is Neutral, neither overbought nor oversold. The STOCH value of 81.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NNI.

Nelnet Risk Analysis

Nelnet disclosed 27 risk factors in its most recent earnings report. Nelnet reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Nelnet Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$2.87B12.1721.56%23.42%59.17%
76
Outperform
$7.27B10.8820.47%6.80%9.41%13.98%
74
Outperform
$4.68B14.569.42%0.87%6.46%116.26%
72
Outperform
$2.73B3.28135.32%10.96%-3.83%62.05%
68
Neutral
$17.69B11.8210.30%3.73%9.66%0.42%
61
Neutral
$6.64B15.9118.99%1.57%-4.34%-38.01%
49
Neutral
$6.63B-0.96%60.62%96.91%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NNI
Nelnet
129.32
15.48
13.60%
SLM
SLM
31.85
10.59
49.81%
WU
Western Union
8.58
-2.46
-22.28%
OMF
OneMain Holdings
61.15
15.95
35.29%
ENVA
Enova International
118.57
34.12
40.40%
UPST
Upstart Holdings
68.89
26.09
60.96%

Nelnet Corporate Events

Private Placements and FinancingFinancial Disclosures
Nelnet Gains $8M from Investee Equity Raise
Positive
Aug 18, 2025

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.

Regulatory Filings and Compliance
Nelnet Bank Files Quarterly Call Report with FDIC
Neutral
Jul 30, 2025

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.

M&A TransactionsFinancial Disclosures
Nelnet Gains $175M from ALLO Holdings Redemption
Positive
Jun 4, 2025

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.

Shareholder MeetingsBusiness Operations and Strategy
Nelnet Holds 2025 Annual Shareholder Meeting
Neutral
May 20, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 19, 2025