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Nelnet (NNI)
:NNI

Nelnet (NNI) AI Stock Analysis

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Nelnet

(NYSE:NNI)

Rating:68Neutral
Price Target:
$124.00
▲(8.91%Upside)
Nelnet's overall score reflects strong financial performance with improved profitability and cash flow, a positive corporate event enhancing financial flexibility, and moderate technical indicators suggesting a stable trading environment. However, the valuation is only fair, offering limited appeal to value or income investors. The absence of earnings call data limits insights into future outlook.
Positive Factors
Financial Performance
The quarter is viewed as positive, driven by strong servicing revenue, better net interest margin, and lower-than-expected expenses.
Investment Opportunities
The recent financing transaction involving ALLO generated significant cash for Nelnet, providing further investment opportunities.
Loan Acquisitions
Nelnet significantly increased its loan acquisitions, creating new opportunities for growth.
Negative Factors
Solar Segment Challenges
Tariff-related uncertainty has weighed on the solar segment, leading to delayed projects and reduced revenue.
Tariff Uncertainty
Tariff-related uncertainty has weighed on the solar segment, leading to delayed projects and reduced revenue.

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 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 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
65
Positive
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
70
Positive
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
75
Positive
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 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.12B2.13B1.41B1.23B1.06B
Gross Profit
1.17B585.03M816.28M725.25M559.25M
EBIT
1.13B943.60M950.71M509.11M453.30M
EBITDA
1.13B1.02B1.01B775.12M923.98M
Net Income Common Stockholders
184.04M91.53M407.35M393.29M352.44M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.18B1.03B2.14B2.64B1.46B
Total Assets
13.78B16.74B19.37B21.68B22.65B
Total Debt
8.31B11.62B14.64B17.63B19.32B
Net Debt
8.12B11.45B12.41B15.92B18.21B
Total Liabilities
10.48B13.51B16.17B18.73B20.02B
Stockholders Equity
3.35B3.26B3.20B2.95B2.63B
Cash FlowFree Cash Flow
641.99M358.92M624.64M485.92M99.50M
Operating Cash Flow
662.89M432.98M684.06M544.87M212.81M
Investing Cash Flow
2.41B1.94B2.27B1.19B621.22M
Financing Cash Flow
-3.17B-2.70B-2.79B-1.49B-1.10B

Nelnet Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price113.86
Price Trends
50DMA
110.03
Positive
100DMA
111.06
Positive
200DMA
110.53
Positive
Market Momentum
MACD
1.67
Positive
RSI
50.77
Neutral
STOCH
56.03
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 113.86 is below the 20-day moving average (MA) of 115.07, above the 50-day MA of 110.03, and above the 200-day MA of 110.53, indicating a neutral trend. The MACD of 1.67 indicates Positive momentum. The RSI at 50.77 is Neutral, neither overbought nor oversold. The STOCH value of 56.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NNI.

Nelnet Risk Analysis

Nelnet disclosed 26 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 2 New Risks
1.
Our business involves risks associated with funding loan assets on our balance sheet and in our loan warehouse financing facilities, particularly market, liquidity, and credit risks, which could materially and adversely affect our financial condition, results of operations, and ability to meet our obligations. Q4, 2024
2.
The profitability and risk profile of our solar tax equity investments may be impacted by the terms and availability of federal incentives and regulatory uncertainty, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities. Q4, 2024

Nelnet Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$2.36B11.0719.94%24.47%54.18%
WUWU
72
Outperform
$3.07B3.44136.84%9.99%-5.16%59.60%
NNNNI
68
Neutral
$4.22B22.355.64%0.96%-2.56%43.22%
OMOMF
68
Neutral
$6.13B10.9117.46%7.93%9.07%
SLSLM
66
Neutral
$6.86B11.7727.60%1.47%-0.70%-12.72%
64
Neutral
$12.80B9.717.59%16985.66%12.07%-7.53%
60
Neutral
$4.85B-10.30%34.69%63.65%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NNI
Nelnet
113.86
12.60
12.44%
SLM
SLM
32.18
11.65
56.75%
WU
Western Union
9.31
-2.62
-21.96%
OMF
OneMain Holdings
51.71
7.46
16.86%
ENVA
Enova International
92.85
33.20
55.66%
UPST
Upstart Holdings
50.66
24.23
91.68%

Nelnet Corporate Events

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.

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.

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.

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.

Financial DisclosuresRegulatory Filings and Compliance
Nelnet Bank Files Q1 2025 Call Report
Neutral
Apr 30, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.