NELNET INC-CL A (NNI) Stock Fundamental Analysis
NYSE:NNI - New York Stock Exchange, Inc. - US64031N1081 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to NNI. NNI was compared to 53 industry peers in the Consumer Finance industry. While NNI is still in line with the averages on profitability rating, there are concerns on its financial health. NNI is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year NNI was profitable.
NNI had a positive operating cash flow in the past year.
NNI had positive earnings in each of the past 5 years.
In the past 5 years NNI always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.83%, NNI is in line with its industry, outperforming 49.06% of the companies in the same industry.
NNI has a Return On Equity of 7.54%. This is comparable to the rest of the industry: NNI outperforms 43.40% of its industry peers.
NNI's Return On Invested Capital of 2.06% is in line compared to the rest of the industry. NNI outperforms 50.94% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NNI is significantly below the industry average of 8.61%.
The last Return On Invested Capital (2.06%) for NNI is above the 3 year average (1.53%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.83% | ||
| ROE | 7.54% | ||
| ROIC | 2.06% |
ROA(3y)1.3%
ROA(5y)1.44%
ROE(3y)6.86%
ROE(5y)9.38%
ROIC(3y)1.53%
ROIC(5y)1.39%
1.3 Margins
With a Profit Margin value of 9.56%, NNI perfoms like the industry average, outperforming 50.94% of the companies in the same industry.
NNI's Profit Margin has been stable in the last couple of years.
NNI has a Operating Margin of 13.93%. This is in the better half of the industry: NNI outperforms 62.26% of its industry peers.
In the last couple of years the Operating Margin of NNI has grown nicely.
NNI has a better Gross Margin (54.94%) than 62.26% of its industry peers.
In the last couple of years the Gross Margin of NNI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.93% | ||
| PM (TTM) | 9.56% | ||
| GM | 54.94% |
OM growth 3Y-28.61%
OM growth 5Y3.31%
PM growth 3Y-31.69%
PM growth 5Y1.26%
GM growth 3Y-11.65%
GM growth 5Y0.65%
2. Health
2.1 Basic Checks
NNI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, NNI has less shares outstanding
NNI has less shares outstanding than it did 5 years ago.
The debt/assets ratio for NNI has been reduced compared to a year ago.
2.2 Solvency
NNI has an Altman-Z score of 0.73. This is a bad value and indicates that NNI is not financially healthy and even has some risk of bankruptcy.
NNI has a Altman-Z score of 0.73. This is comparable to the rest of the industry: NNI outperforms 50.94% of its industry peers.
The Debt to FCF ratio of NNI is 14.79, which is on the high side as it means it would take NNI, 14.79 years of fcf income to pay off all of its debts.
NNI has a Debt to FCF ratio of 14.79. This is comparable to the rest of the industry: NNI outperforms 41.51% of its industry peers.
NNI has a Debt/Equity ratio of 2.83. This is a high value indicating a heavy dependency on external financing.
NNI has a Debt to Equity ratio (2.83) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.83 | ||
| Debt/FCF | 14.79 | ||
| Altman-Z | 0.73 |
ROIC/WACC0.28
WACC7.36%
2.3 Liquidity
NNI has a Current Ratio of 0.21. This is a bad value and indicates that NNI is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.21, NNI is not doing good in the industry: 73.58% of the companies in the same industry are doing better.
NNI has a Quick Ratio of 0.21. This is a bad value and indicates that NNI is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.21, NNI is doing worse than 73.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.21 | ||
| Quick Ratio | 0.21 |
3. Growth
3.1 Past
NNI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 91.30%, which is quite impressive.
Measured over the past years, NNI shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.61% on average per year.
The Revenue has grown by 25.42% in the past year. This is a very strong growth!
Measured over the past years, NNI shows a small growth in Revenue. The Revenue has been growing by 3.92% on average per year.
EPS 1Y (TTM)91.3%
EPS 3Y-19.07%
EPS 5Y-0.61%
EPS Q2Q%4425%
Revenue 1Y (TTM)25.42%
Revenue growth 3Y13.54%
Revenue growth 5Y3.92%
Sales Q2Q%54.08%
3.2 Future
Based on estimates for the next years, NNI will show a very strong growth in Earnings Per Share. The EPS will grow by 20.90% on average per year.
Based on estimates for the next years, NNI will show a small growth in Revenue. The Revenue will grow by 7.46% on average per year.
EPS Next Y36.73%
EPS Next 2Y20.9%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year10.66%
Revenue Next 2Y7.46%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 21.85 indicates a rather expensive valuation of NNI.
NNI's Price/Earnings ratio is a bit more expensive when compared to the industry. NNI is more expensive than 71.70% of the companies in the same industry.
NNI is valuated rather cheaply when we compare the Price/Earnings ratio to 28.79, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 15.98 indicates a correct valuation of NNI.
Based on the Price/Forward Earnings ratio, NNI is valued a bit more expensive than the industry average as 60.38% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of NNI to the average of the S&P500 Index (21.38), we can say NNI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.85 | ||
| Fwd PE | 15.98 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as NNI.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NNI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.99 | ||
| EV/EBITDA | 23.99 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NNI has a very decent profitability rating, which may justify a higher PE ratio.
NNI's earnings are expected to grow with 20.90% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.59
PEG (5Y)N/A
EPS Next 2Y20.9%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.05%, NNI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.52, NNI has a dividend in line with its industry peers.
With a Dividend Yield of 1.05, NNI pays less dividend than the S&P500 average, which is at 2.47.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
5.2 History
The dividend of NNI is nicely growing with an annual growth rate of 8.59%!
NNI has paid a dividend for at least 10 years, which is a reliable track record.
NNI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.59%
Div Incr Years10
Div Non Decr Years13
5.3 Sustainability
NNI pays out 16.18% of its income as dividend. This is a sustainable payout ratio.
The dividend of NNI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP16.18%
EPS Next 2Y20.9%
EPS Next 3YN/A
105.76
-1.21 (-1.13%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners49.34%
Inst Owner Change0.38%
Ins Owners37.87%
Ins Owner Change7.1%
Market Cap3.85B
Analysts45
Price Target117.3 (10.91%)
Short Float %1.8%
Short Ratio4.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
Yearly Dividend1.11
Dividend Growth(5Y)8.59%
DP16.18%
Div Incr Years10
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-27.82%
Min EPS beat(2)-94.9%
Max EPS beat(2)39.26%
EPS beat(4)2
Avg EPS beat(4)-8.4%
Min EPS beat(4)-94.9%
Max EPS beat(4)39.26%
EPS beat(8)2
Avg EPS beat(8)-30.62%
EPS beat(12)5
Avg EPS beat(12)-2.73%
EPS beat(16)8
Avg EPS beat(16)3.76%
Revenue beat(2)1
Avg Revenue beat(2)4.01%
Min Revenue beat(2)-10.5%
Max Revenue beat(2)18.53%
Revenue beat(4)2
Avg Revenue beat(4)0.61%
Min Revenue beat(4)-10.5%
Max Revenue beat(4)18.53%
Revenue beat(8)2
Avg Revenue beat(8)-4.55%
Revenue beat(12)6
Avg Revenue beat(12)13.61%
Revenue beat(16)10
Avg Revenue beat(16)14.25%
PT rev (1m)9.09%
PT rev (3m)13.21%
EPS NQ rev (1m)2.62%
EPS NQ rev (3m)2.95%
EPS NY rev (1m)11.03%
EPS NY rev (3m)11.07%
Revenue NQ rev (1m)0.6%
Revenue NQ rev (3m)4.57%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)4.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.85 | ||
| Fwd PE | 15.98 | ||
| P/S | 1.46 | ||
| P/FCF | 5.99 | ||
| P/OCF | 5.8 | ||
| P/B | 1.15 | ||
| P/tB | 1.22 | ||
| EV/EBITDA | 23.99 |
EPS(TTM)4.84
EY4.58%
EPS(NY)6.62
Fwd EY6.26%
FCF(TTM)17.66
FCFY16.69%
OCF(TTM)18.23
OCFY17.24%
SpS72.65
BVpS92.13
TBVpS86.78
PEG (NY)0.59
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.83% | ||
| ROE | 7.54% | ||
| ROCE | 3.04% | ||
| ROIC | 2.06% | ||
| ROICexc | 2.09% | ||
| ROICexgc | 2.16% | ||
| OM | 13.93% | ||
| PM (TTM) | 9.56% | ||
| GM | 54.94% | ||
| FCFM | 24.3% |
ROA(3y)1.3%
ROA(5y)1.44%
ROE(3y)6.86%
ROE(5y)9.38%
ROIC(3y)1.53%
ROIC(5y)1.39%
ROICexc(3y)1.55%
ROICexc(5y)1.4%
ROICexgc(3y)1.58%
ROICexgc(5y)1.43%
ROCE(3y)2.18%
ROCE(5y)1.95%
ROICexcg growth 3Y-4.39%
ROICexcg growth 5Y20.55%
ROICexc growth 3Y-4.81%
ROICexc growth 5Y20.27%
OM growth 3Y-28.61%
OM growth 5Y3.31%
PM growth 3Y-31.69%
PM growth 5Y1.26%
GM growth 3Y-11.65%
GM growth 5Y0.65%
F-Score8
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.83 | ||
| Debt/FCF | 14.79 | ||
| Debt/EBITDA | 18.97 | ||
| Cap/Depr | 15.77% | ||
| Cap/Sales | 0.79% | ||
| Interest Coverage | 0.56 | ||
| Cash Conversion | 132.46% | ||
| Profit Quality | 254.32% | ||
| Current Ratio | 0.21 | ||
| Quick Ratio | 0.21 | ||
| Altman-Z | 0.73 |
F-Score8
WACC7.36%
ROIC/WACC0.28
Cap/Depr(3y)33.47%
Cap/Depr(5y)40.42%
Cap/Sales(3y)2.5%
Cap/Sales(5y)3.94%
Profit Quality(3y)306.36%
Profit Quality(5y)214.66%
High Growth Momentum
Growth
EPS 1Y (TTM)91.3%
EPS 3Y-19.07%
EPS 5Y-0.61%
EPS Q2Q%4425%
EPS Next Y36.73%
EPS Next 2Y20.9%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)25.42%
Revenue growth 3Y13.54%
Revenue growth 5Y3.92%
Sales Q2Q%54.08%
Revenue Next Year10.66%
Revenue Next 2Y7.46%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y69.04%
EBIT growth 3Y-18.94%
EBIT growth 5Y7.36%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y79.34%
FCF growth 3Y9.73%
FCF growth 5Y25.48%
OCF growth 1Y53.44%
OCF growth 3Y6.75%
OCF growth 5Y17.27%