Nelnet Q2 net income jumps to $181.5 mln on ALLO Holdings gain

Overview

• Nelnet Q2 GAAP net income rises to $181.5 mln, driven by ALLO Holdings gain

• Asset Generation segment sees increased net interest income despite loan balance decline

• Loan Servicing revenue up due to higher private education loan volumes

Outlook

• Company focuses on loan servicing, consumer lending, payments, and technology investment

• Nelnet continues to invest in education technology services

• Company emphasizes strategic cost management and technology efficiencies

Result Drivers

• ALLO REDEMPTION - Gain of $175 mln from partial redemption of ALLO investment boosted Q2 results

• LOAN SPREAD - Increased loan spread drove higher net interest income in Asset Generation segment

• LOAN SERVICING VOLUME - Revenue growth in Loan Servicing segment due to higher private education loan servicing volumes

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the consumer lending peer group is "buy."

• Wall Street's median 12-month price target for Nelnet Inc is $130.00, about 4% above its August 5 closing price of $124.78

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release: ID:nPn29wsQja