Nelnet Inc

Nelnet reported second-quarter CY2026 revenue of $410 million, missing analyst estimates of $420 million and marking a 20.5% year-on-year decline. Net interest income came in at $96.01 million, below the $105 million consensus, while adjusted earnings per share of $1.77 fell 16.9% short of the expected $2.13. Pre-tax profit was $65.41 million, representing a 16% margin. CEO Jeff Noordhoek described the results as reflecting the strength of the company's diversified strategy across consumer lending, servicing, payments, and technology. The stock remained flat at $135.20 following the release.

Nelnet shares have dropped 6% over the past six months to $131.79, underperforming the S&P 500's 7.7% gain. Analysts point to three concerns: revenue grew at a tepid 5.5% compounded annual rate over five years, return on equity averaged just 8.4% against a sector average of about 10%, and net debt of $7.7 billion against $533 million in EBITDA yields a high 12.9 times net-debt-to-EBITDA ratio. The stock trades at a forward price-to-sales ratio of 2.8 times, but a lack of published profit estimates makes valuation uncertain. The firm recommends avoiding Nelnet and instead suggests looking at a dominant software business.

StockStory identified Clover Health as a Russell 2000 stock to own for decades, citing exceptional 31.2% annual revenue growth over the last two years, rising adjusted operating profits, and positive free cash flow. The firm flagged Rush Street Interactive and Nelnet as risky, pointing to Rush Street's below-peer operating margin of 6.9% and Nelnet's muted 5.5% annual revenue growth and 8.4% return on equity. Clover Health trades at 57.9 times forward earnings, Rush Street at 44.2 times, and Nelnet at 2.8 times forward sales.

The 20 consumer finance stocks tracked by StockStory reported a satisfactory first quarter, with revenues beating analysts' consensus estimates by 1.9% and next quarter's revenue guidance coming in 0.7% above expectations. Credit Acceptance posted revenues of $406 million, up 1.4% year on year but missing estimates by 13.1%, while Sallie Mae delivered the best performance with revenues of $560 million, down 3.6% year on year but beating estimates by 3.9%. Nelnet was the weakest, with revenues of $353.2 million, down 7.1% year on year and missing estimates by 20.4%. Ally Financial reported revenues of $2.18 billion, up 5.5% year on year and beating estimates by 1.8%, and Affirm posted revenues of $1.04 billion, up 32.6% year on year and beating estimates by 4.3%. Share prices of the group have been resilient, rising 7.2% on average since the latest earnings results.