Yahoo Finance Analysts Have Been Trimming Their Nelnet, Inc. (NYSE:NNI) Price Target After Its Latest Report
Last week, you might have seen that Nelnet, Inc. (NYSE:NNI) released its first-quarter result to the market. The early response was not positive, with shares down 3.3% to US$45.11 in the past week. It was an okay report, and revenues came in at US$296m, approximately in line with analyst estimates leading up to the results announcement. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Nelnet
Taking into account the latest results, the consensus forecast from Nelnet's lone analyst is for revenues of US$1.09b in 2020, which would reflect a notable 11% improvement in sales compared to the last 12 months. Before this earnings result, the analyst had predicted US$1.16b revenue in 2020, although there was no accompanying EPS estimate. The consensus seems a bit less optimistic overall, with the revenue forecasts following the latest results.
Intriguingly,the analyst has cut their price target 17% to US$50.00 showing a clear decline in sentiment around Nelnet's valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analyst is definitely expecting Nelnet'sgrowth to accelerate, with the forecast 11% growth ranking favourably alongside historical growth of 5.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Nelnet to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst downgraded their revenue estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Nelnet's future valuation.
We have estimates for Nelnet from one covering analyst, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 5 warning signs for Nelnet you should be aware of, and 2 of them are a bit concerning.
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