Nelnet, Inc. logo NNI - Nelnet, Inc.

Price: -- -- | CONSENSUS: Hold DETAILS
STRONG
BUY 0
BUY 0
HOLD 3
SELL 0
STRONG
SELL 0
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 80% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Fair Value Moderate
Trading 22.1% below fair value
Current Price $128.95
Bear Case $104.13 19.3% downside ($104.13 - $128.95) / $128.95 = -19.3% ROTCE 9.2% → 1.07x TBV
Fair Value $165.61 28.4% upside ($165.61 - $128.95) / $128.95 = 28.4% ROTCE 12.2% → 1.70x TBV
Bull Case $202.50 57.0% upside ($202.50 - $128.95) / $128.95 = 57.0% ROTCE 14.1% → 2.08x TBV

Adjust Assumptions

12.2%
8.8%

Key Value Driver

ROTCE (12.2%) vs. cost of equity (8.8%)

Implied Market Multiple 1.32x

Plain-Language Summary

With ROTCE of 12.2% vs. 8.8% cost of equity, fair P/TBV is 1.70x on $97.36 tangible book, implying $165.61 per share. DDM cross-check: $59.40.

Warnings

⚠ Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
⚠ Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
ℹ Dividend-based valuation: $59.40 (64% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.

Key Risks

  • Book value quality matters as much as level — check loan loss reserves
  • Interest rate sensitivity creates non-linear earnings surprises
  • Insurance reserving is actuarial, not financial — errors emerge slowly