NELNET INC-CL A (NNI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NNI - US64031N1081 - Common Stock
130.92 USD
-1.35 (-1.02%)
130.92 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to NNI. NNI was compared to 54 industry peers in the Consumer Finance industry. There are concerns on the financial health of NNI while its profitability can be described as average. NNI has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- NNI had positive earnings in the past year.
- In the past year NNI had a positive cash flow from operations.
- Each year in the past 5 years NNI has been profitable.
- In the past 5 years NNI always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of NNI (3.07%) is comparable to the rest of the industry.
- NNI has a Return On Equity (11.66%) which is in line with its industry peers.
- NNI has a Return On Invested Capital (1.87%) which is in line with its industry peers.
- NNI had an Average Return On Invested Capital over the past 3 years of 1.53%. This is significantly below the industry average of 12.42%.
- The 3 year average ROIC (1.53%) for NNI is below the current ROIC(1.87%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.07% | ||
| ROE | 11.66% | ||
| ROIC | 1.87% |
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
- The Profit Margin of NNI (20.79%) is better than 79.63% of its industry peers.
- In the last couple of years the Profit Margin of NNI has remained more or less at the same level.
- The Operating Margin of NNI (16.50%) is better than 61.11% of its industry peers.
- In the last couple of years the Operating Margin of NNI has grown nicely.
- Looking at the Gross Margin, with a value of 62.80%, NNI is in the better half of the industry, outperforming 61.11% of the companies in the same industry.
- NNI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.5% | ||
| PM (TTM) | 20.79% | ||
| GM | 62.8% |
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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NNI is destroying value.
- Compared to 1 year ago, NNI has less shares outstanding
- NNI has less shares outstanding than it did 5 years ago.
- NNI has a better debt/assets ratio than last year.
2.2 Solvency
- NNI has an Altman-Z score of 0.74. This is a bad value and indicates that NNI is not financially healthy and even has some risk of bankruptcy.
- The Altman-Z score of NNI (0.74) is comparable to the rest of the industry.
- NNI has a debt to FCF ratio of 20.02. This is a negative value and a sign of low solvency as NNI would need 20.02 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 20.02, NNI is in line with its industry, outperforming 50.00% of the companies in the same industry.
- A Debt/Equity ratio of 2.55 is on the high side and indicates that NNI has dependencies on debt financing.
- NNI's Debt to Equity ratio of 2.55 is in line compared to the rest of the industry. NNI outperforms 53.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.55 | ||
| Debt/FCF | 20.02 | ||
| Altman-Z | 0.74 |
ROIC/WACC0.26
WACC7.35%
2.3 Liquidity
- A Current Ratio of 0.19 indicates that NNI may have some problems paying its short term obligations.
- NNI has a worse Current ratio (0.19) than 68.52% of its industry peers.
- NNI has a Quick Ratio of 0.19. This is a bad value and indicates that NNI is not financially healthy enough and could expect problems in meeting its short term obligations.
- NNI's Quick ratio of 0.19 is on the low side compared to the rest of the industry. NNI is outperformed by 68.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.19 | ||
| Quick Ratio | 0.19 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 170.36% over the past year.
- NNI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.61% yearly.
- The Revenue for NNI has decreased by -21.07% in the past year. This is quite bad
- NNI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.92% yearly.
EPS 1Y (TTM)170.36%
EPS 3Y-19.07%
EPS 5Y-0.61%
EPS Q2Q%4100%
Revenue 1Y (TTM)-21.07%
Revenue growth 3Y13.54%
Revenue growth 5Y3.92%
Sales Q2Q%39.12%
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 35.54% on average per year.
- NNI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.59% yearly.
EPS Next Y36.18%
EPS Next 2Y35.54%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year10.59%
Revenue Next 2Y8.45%
Revenue Next 3Y7.59%
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
- Based on the Price/Earnings ratio of 15.77, the valuation of NNI can be described as correct.
- NNI's Price/Earnings ratio is a bit more expensive when compared to the industry. NNI is more expensive than 66.67% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.30. NNI is valued slightly cheaper when compared to this.
- Based on the Price/Forward Earnings ratio of 14.72, the valuation of NNI can be described as correct.
- NNI's Price/Forward Earnings ratio is in line with the industry average.
- NNI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.77 | ||
| Fwd PE | 14.72 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NNI is on the same level as its industry peers.
- The rest of the industry has a similar Price/Free Cash Flow ratio as NNI.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.13 | ||
| EV/EBITDA | 28.55 |
4.3 Compensation for Growth
- NNI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The decent profitability rating of NNI may justify a higher PE ratio.
- NNI's earnings are expected to grow with 35.54% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.44
PEG (5Y)N/A
EPS Next 2Y35.54%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- With a yearly dividend of 0.97%, NNI is not a good candidate for dividend investing.
- NNI's Dividend Yield is comparable with the industry average which is at 2.58.
- With a Dividend Yield of 0.97, NNI pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
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
- 9.70% of the earnings are spent on dividend by NNI. This is a low number and sustainable payout ratio.
- NNI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP9.7%
EPS Next 2Y35.54%
EPS Next 3YN/A
NELNET INC-CL A / NNI FAQ
What is the ChartMill fundamental rating of NELNET INC-CL A (NNI) stock?
ChartMill assigns a fundamental rating of 5 / 10 to NNI.
Can you provide the valuation status for NELNET INC-CL A?
ChartMill assigns a valuation rating of 5 / 10 to NELNET INC-CL A (NNI). This can be considered as Fairly Valued.
How profitable is NELNET INC-CL A (NNI) stock?
NELNET INC-CL A (NNI) has a profitability rating of 6 / 10.
What is the expected EPS growth for NELNET INC-CL A (NNI) stock?
The Earnings per Share (EPS) of NELNET INC-CL A (NNI) is expected to grow by 36.18% in the next year.
How sustainable is the dividend of NELNET INC-CL A (NNI) stock?
The dividend rating of NELNET INC-CL A (NNI) is 6 / 10 and the dividend payout ratio is 9.7%.