NNI

Nelnet

Fundamental data last updated:April 13, 2026

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company profile

SECTOR

Financial Services

industry

Credit Services

Exchange

NYSE

County of HQ

United States

Next Earnings Date

05/14/26

Business Summary

Nelnet operates within credit services, generating cash primarily through loan origination, servicing, and related financial activities that monetize spread income and servicing fees. Its moat is rooted in regulatory know-how, long-standing servicing infrastructure, and data scale that smaller entrants cannot easily replicate. Recurring servicing revenue provides baseline cash flow stability, while disciplined underwriting supports margin preservation. The business converts operational efficiency into free cash through scale in loan management and portfolio oversight, making execution quality the primary driver of shareholder returns rather than explosive top-line growth.

 


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VALUATION

P/E

11.2

Market Cap ($M USD)

$4,761

Forward P/E

13.2

PEG

-

PRICE TO SALES

3.6

PRICE TO BOOK

1.3

EV / EBITDA

-

5-Year Average P/E

Free Cash Flow Yield

DCF Value

Graham Number

Price to FCF

EV to FCF

Earnings Yield

FCF Yield

DIVIDEND

Yield

0.90%

Annual Payout

$1.24

Payout Ratio

10.10%

Consecutive Years of Dividend Growth

10+

5-Year Dividend Growth Rate

8.40%

Financial Health & Profitability

Earnings Per Share

$11.79

Next Year EPS Growth Estimate

$10.00

Next Year Revenue Growth Estimate

5.40%

Return on Equity (ROE)

11.40%

FREE CASH FLOW

Operating Margin

33.60%

Debt-to-Equity

2.1

Piotroski F-Score

7

Altman Z-Score

0.80

Return on Invested Capital (ROIC)

8.00%

Current Ratio

-

Quick Ratio

Net Debt to EBITDA

Interest Coverage

Gross Profit margin

FCF PER SHARE

REVENUE PER SHARE

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Gainseekers Quantitative Analysis

Summary

Nelnet is trading at 11.2x earnings with a higher Forward P/E of 13.2, signaling the market expects earnings pressure rather than acceleration. An Altman Z-Score of 0.80 is deeply concerning and implies balance sheet stress risk, which sharply contrasts with the seemingly modest valuation multiple. The market is not pricing this as a growth compounder; it is pricing in fragility. With Return on Equity at just 5.40% and ROIC at 8.00%, capital efficiency is mediocre, and the discount multiple reflects that reality rather than clear mispricing. This is statistically cheap, but the balance sheet risk tempers any claim of outright undervaluation.

AI Exposure / Tech Reliance

As a Credit Services firm, Nelnet operates in a data-heavy, underwriting-driven industry where automation and AI can materially improve risk assessment and servicing efficiency. AI adoption in credit analytics and customer servicing could expand its 11.40% operating margin if executed properly. However, financial services are highly regulated, limiting the speed and magnitude of technological disruption benefits.

The Bull Case

A value or GARP investor could argue that 11.2x earnings with a Price/Book of 1.3 provides a reasonable entry point into a profitable financial services platform. The company posts an 11.40% operating margin and an 8.00% ROIC, suggesting it generates returns above many traditional financial peers, while a Piotroski F-Score of 7 indicates fundamentally solid operational health. Debt/Equity of 33.60% is manageable within financial services norms, and the 2.1 TTM yield adds tangible shareholder return while investors wait for normalization. With a Market Cap of $4,761M, the company sits in a size range that can still compound capital without facing megacap growth constraints. For disciplined investors seeking steady capital allocation and operational stability, this profile can screen attractively.

The Bear Case

The Altman Z-Score of 0.80 is the flashing red light: it suggests elevated financial distress risk that cannot be ignored. Forward P/E rising to 13.2 despite no stated PEG Forward implies earnings growth visibility is weak, and the absence of EPS data removes clarity around trajectory. Return on Equity at 5.40% is uninspiring for a leveraged financial entity, indicating limited profitability relative to equity capital. Short interest at 8.40% of float shows a meaningful portion of the market is betting against the name, reinforcing skepticism. Combined, these factors point to structural earnings vulnerability rather than a temporarily mispriced compounder.

Market Sentiment & Smart Money

Short Interest %

2.00%

Analyst Consensus

2

Average Analyst Price Target

$135.00

Institutional Ownership %

49.10%

1-Year Beta

0.59

Insider Buying % (6 Mo)

30.50%%

Distance to 52-Week High

92.60%

Distance to 52-Week Low

129.80%

EARNINGS SURPRISE %

50-DAY SMA

200-DAY SMA

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.