Nelnet (Nelnet) Graham Number : $82.20 (As of Dec. 2023)

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What is Nelnet Graham Number?

Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2024-04-25), the stock price of Nelnet is $94.13. Nelnet's graham number for the quarter that ended in Dec. 2023 was $82.20. Therefore, Nelnet's Price to Graham Number ratio for today is 1.15.

The historical rank and industry rank for Nelnet's Graham Number or its related term are showing as below:

NNI' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.48 Med: 0.75 Max: 1.25
Current: 1.15

During the past 13 years, the highest Price to Graham Number ratio of Nelnet was 1.25. The lowest was 0.48. And the median was 0.75.

NNI's Price-to-Graham-Number is ranked worse than
64.57% of 381 companies
in the Credit Services industry
Industry Median: 0.85 vs NNI: 1.15

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.

Nelnet Graham Number Historical Data

The historical data trend for Nelnet's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Nelnet Graham Number Chart

Nelnet Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Graham Number

Get a 7-Day Free Trial

65.60

116.45

117.02

105.00

76.29

Nelnet Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Graham Number	Get a 7-Day Free Trial															104.92	100.72	94.44	89.26	82.20

Competitive Comparison of Nelnet's Graham Number

For the Credit Services subindustry, Nelnet's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Nelnet's Price-to-Graham-Number Distribution in the Credit Services Industry

For the Credit Services industry and Financial Services sector, Nelnet's Price-to-Graham-Number distribution charts can be found below:

* The bar in red indicates where Nelnet's Price-to-Graham-Number falls into.

Nelnet Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Nelnet's Graham Number for the fiscal year that ended in Dec. 2023 is calculated as

	Graham Number
=	sqrt of (22.5	*	Tangible Book per Share	*	EPS without NRI)
=	sqrt of (22.5	*	82.554	*	3.133)
=	76.29

Nelnet's Graham Number for the quarter that ended in Dec. 2023 is calculated as

	Graham Number
=	sqrt of (22.5	*	Tangible Book per Share	*	EPS without NRI (TTM))
=	sqrt of (22.5	*	82.554	*	3.638)
=	82.20

Nelnet (NYSE:NNI) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Nelnet's Price to Graham number Ratio for today is calculated as

Price to Graham number	=	Share Price (Today)	/	Graham number (Q: Dec. 2023 )
	=	94.13	/	82.20
	=	1.15

Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.

Nelnet Graham Number Related Terms

Thank you for viewing the detailed overview of Nelnet's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.

Nelnet (Nelnet) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » Nelnet Inc (NYSE:NNI) » Definitions » Graham Number

Comparable Companies

Traded in Other Exchanges

NIJ:Germany

Address

121 South 13th Street, Suite 100, Lincoln, NE, USA, 68508

Website

https://www.nelnet.com

Nelnet Inc is a United States based company engaged in these five segments; Loan Servicing and Systems focuses on student and consumer loan origination services and servicing, loan origination and servicing-related technology solutions, and outsourcing business services, Education Technology, Services, and Payment Processing provides education services, payment technology, and community management solutions for K-12 schools, institutions, churches, and businesses, Asset Generation and Management Includes the acquisition and management of student and other loan assets, Nelnet Bank focuses on the private education and unsecured consumer loan markets, and Communications provides fiber optic service for internet, telephone, and television services.

Executives

William J Munn	officer: Secy, Chief Legal Off, Gen Cou	121 S. 13TH STREET, SUITE 100, LINCOLN NE 68508
Van Deun Jona M	director	121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508
Dan D Muhleisen	10 percent owner	6321 DOECREEK CIRCLE, LINCOLN NE 68516
Preeta D Bansal	director	121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508
David S Graff	director	121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508
Kimberly Kay Rath	director	121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508
Kathleen Anne Farrell	director	121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508
Matthew W Dunlap	director, officer: Chief Business Develop. Off.	121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508
Magnolia Capital Fund, Lp	other: See remarks	1601 DODGE STREET, SUITE 3300, OMAHA NE 68102
Magnolia Group, Llc	other: See remarks	1601 DODGE STREET, SUITE 3300, OMAHA NE 68102
Adam K Peterson	director, other: See below	1601 DODGE STREET, SUITE 3300, OMAHA NE 68102
Shelby J Butterfield	10 percent owner	121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508
Michael S Dunlap	director, 10 percent owner, officer: Chairman, Co-Chief Ex. Officer	121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508
Joann M Martin	director	6221 ANDREW COURT, LINCOLN NE 68512
Angie Mulheisen	10 percent owner	3643 S 48TH STREET P O BOX 82535, LINCOLN NE 68501-2535