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    Should Nelnet’s (NNI) Revenue Momentum and Capital Discipline Prompt a Fresh Look From Investors?

    Simply Wall St·12/15/2025 05:10:55
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    • Recent commentary highlighted Nelnet’s past two years of approximately 18% annual revenue growth and earnings expansion supported by share buybacks, reflecting growing market share across its student loan servicing, education technology, payment processing, and banking activities.
    • An interesting angle for investors is management’s track record of allocating capital into profitable ventures, reflected in a five-year return on equity of about 10.7%, which reinforces confidence in how the company is run.
    • We’ll now explore how this combination of strong recent revenue growth and disciplined capital allocation shapes Nelnet’s broader investment narrative.

    Find companies with promising cash flow potential yet trading below their fair value.

    What Is Nelnet's Investment Narrative?

    To own Nelnet, you need to believe that its mix of student loan servicing, education technology, payments, and banking can keep throwing off solid cash, even as headline revenue is expected to drift lower over time. The recent momentum-focused commentary largely reinforces what was already in motion: earnings have grown very quickly, margins improved, and management is leaning into that with a larger buyback and steadily rising dividend. That kind of capital return profile may keep buybacks and dividend policy in focus as near term catalysts, rather than the news itself moving the needle. The flip side is that stronger recent results can raise expectations just as forecasts point to modest revenue contraction and highlight that debt is not yet comfortably covered by operating cash flow.

    But there is one balance sheet issue current shareholders should not ignore. Nelnet's shares are on the way up, but could they be overextended? Uncover how much higher they are than fair value.

    Exploring Other Perspectives

    NNI 1-Year Stock Price Chart
    NNI 1-Year Stock Price Chart

    Two fair value views from the Simply Wall St Community span about US$22.80 to US$135.00, underlining just how far apart individual models can land. Set against that wide spread, the current emphasis on earnings strength, capital returns, and soft revenue forecasts gives you a useful framework to weigh those competing valuations and the risk that recent outperformance proves hard to repeat.

    Explore 2 other fair value estimates on Nelnet - why the stock might be worth less than half the current price!

    Build Your Own Nelnet Narrative

    Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.