Nelnet, Inc. relative valuation is UNDERVALUED and it has a fundamental analysis score of 43.
Our analysis is based on comparing Nelnet, Inc. with the following peers – Navient Corp, SLM Corp, Discover Financial Services and Fidelity National Information Services, Inc. (NAVI-US, SLM-US, DFS-US and FIS-US).
Nelnet, Inc. has shown good performance overall, both over the last one year (at 44.96%) as well as over the last month (at 16.57%). Share price performance over the last month, though has been lower than that over the last year. But Nelnet, Inc.’s stock has done better than its overall peer group whose performance was 2.57% over the last month.
- Considering peers, relative outperformance over the last year and the last month suggest a leading position.
- It trades at a lower Price/Book multiple (0.80) than its peer median (1.91).
- The market expects NNI-US to grow more slowly than its peers and for its median ROE to decline.
- NNI-US employs relatively high amounts of capital while generating median profit margins.
- Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings.
- NNI-US’s return on equity currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
- The company’s margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.
- While NNI-US’s revenues growth in recent years has been around the peer median, the stock’s below peer median P/E ratio suggests that the market likely sees the company’s long-term growth prospects to be fading.
- The company is likely overinvesting in a business with only median returns.
- Our analysis rates Nelnet, Inc. as UNDERVALUED relative to its peers.
Share Price Performance
Considering peers, relative outperformance over the last year and the last month suggest a leading position.
NNI-US’s share price performance of 44.96% over the last 12 months is above peer median of 24.67%. The 30-day trend in its share price performance of 16.57% is also above the peer median of 2.57% suggesting that this company is a leading performer relative to its peers.
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Nelnet, Inc.’s price of USD 56.55 is lower than CapitalCube’s implied price of USD 82.76. CapitalCube believes that at these levels, Nelnet, Inc. is undervalued and has upside potential. Over the last 52 week period, the stock has fluctuated between USD 37.86 and USD 56.64.
Valuation & Peer Metrics
A complete list of valuation metrics is available on the company page.
Nelnet, Inc. engages in the provision of education-related products and services, as well as loan asset management. It operates through the following segments: Loan Systems and Servicing, Tuition Payment Processing and Campus Commerce, Communications, and Asset Generation and Management. The System and Servicing segment specializes in student loan portfolio and the portfolios of third parties such as loan conversion activities, application processing, borrower updates, customer service, payment processing, due diligence procedures, funds management reconciliations, and claim processing. The Tuition Payment Processing and Campus Commerce segment provides products and services to help students and families manage the payment of education costs at all levels, as well as school information system software for private and faith-based schools that help schools automate administrative processes such as admissions, scheduling, student billing, attendance, and grade book management. The Communications segment is the operation of Allo Communications LLC which provides pure optic service to homes and businesses for internet, broadband, television, and telephone services. Asset Generation and Management segment is the acquisition, management, and ownership of student loan assets. The company was founded by Michael S. Dunlap and Stephen F. Butterfield in 1977 and is headquartered in Lincoln, NE.
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