Nelnet Inc. Common Stock (NNI)

FairStock Score: 58/100 — STEADY

Key Financials

Strengths

• Solid return on equity of 11.6% above cost of capital

Concerns

• High leverage at 2.18x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.7 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Nelnet Inc. Common Stock is a small-cap financial services company valued at $5.1 billion. The business generates $1.7 billion in annual revenue with a 3.5% net margin. From a quality standpoint, Nelnet shows distressed Altman Z-Score of 0.7 warrants caution and adequate 12% ROE. On valuation, the stock is attractively valued at 12.0x earnings, with a modest 15% margin of safety vs Graham Number. Growth dynamics show revenue growing at 13.7% and profit growth of -8.5%. Our composite FairStock Score of 58/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Elevated leverage at 2.2x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer