Nelnet recently reported strong results for the first quarter, beating the Zacks Consensus Estimate by 22 cents.
Growth and Income
Analysts estimate that Nelnet will produce long-term EPS growth of 17.0%, and its stock has a dividend yield of 1.5%.
The Zacks #2 Rank stock trades at 6.0x 2011 consensus estimates.
Nelnet is a transaction processing and finance company. It provides education-related products and services including student loan servicing, claim processing, and post-default collections.
The federal government recently eliminated the role of private lenders in originating federal student loans. However, Nelnet is expected to play a major role as a participant in the Department of Educations servicing contract, under which it will service and collect government guaranteed loans.
Nelnet services over 1.2 million borrowers for the Department of Education.
Due to a decline in its student loan origination business, analysts are forecasting Nelnet's earnings to decline over the next two years. Longer term, however, they are more bullish and expect NNI to have long-term EPS growth of 17%.
Nelnet's fee-based revenue from its payment processing and enrollment services businesses increased $6.3 million, or 14%, to $50.7 million, compared with the same period in 2009. The company also reported earnings per share of $1.14, soaring past the Zacks Consensus Estimate by 22 cents, or 23.9%.
In the last month, the Zacks Consensus Estimate for 2010 is up 51 cents, or 14.4%, to $4.05, and the Zacks Consensus Estimate for 2011 is up 34 cents, or 12.5%, to $3.06.
Read the March 31 commentary on Nelnet
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