Although the student loan reform law has barred the company from originating federal student loans since July, in recent years, Nelnet has expanded in areas that are independent of the federal program. Increasing revenues from its fee-based business and servicing of loans for the Education department along with restructuring initiatives should support its earnings.
With an expectation for a low interest rate environment, its floor income would also benefit. Though concerns remain over the implementation of the recent financial reform act and a challenging economic environment, Nelnet's solid capital position is encouraging. Hence, our Outperform recommendation remains in place.
NELNET INC CL-A (NNI): Free Stock Analysis Report
Zacks Investment Research
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