Nelnet, Inc. (NNI): A Bull Case Theory

We came across a bullish thesis on Nelnet, Inc. on Coughlin Capital’s Substack by Brian Coughlin. In this article, we will summarize the bulls’ thesis on NNI. Nelnet, Inc.’s share was trading at $128.68 as of August 13^th. NNI’s trailing and forward P/E were 14.23 and 15.75, respectively according to Yahoo Finance.

Nelnet continues to exemplify a disciplined, long-term compounder, driven by owner-operators with substantial personal stakes in the business. The company’s management avoids chasing trends or overextending, consistently demonstrating precise capital allocation that steadily increases book value per share while returning capital to shareholders through dividends and buybacks. This approach was evident in Q2 2025, highlighted by the partial redemption of Nelnet’s stake in ALLO.

The company generated $410.9 million in cash and booked a $175 million pre-tax gain, reducing its voting interest from 45% to 27% while retaining the remaining stake. Notably, Nelnet carries this remaining stake at zero on its balance sheet, despite an estimated market value of around $253 million. This conservative accounting underscores the management’s disciplined approach: they avoid inflating expectations by only recognizing realized gains, maintaining transparency and grounding shareholder expectations while preserving substantial potential upside.

The combination of steady book value growth, disciplined capital allocation, and prudent accounting reflects a business model built for sustainable compounding over time. For long-term investors, Nelnet offers both resilience and upside potential, with a management team whose track record of conservative, shareholder-aligned decisions continue to create value quietly but consistently. The company’s ability to generate meaningful cash flow, return capital efficiently, and preserve optionality in unrealized investments positions it as a compelling, low-risk opportunity for patient investors seeking steady growth and upside from thoughtful capital management.

Previously, we covered a bullish thesis on Nelnet, Inc. (NNI) by Aaron Edelheit in May 2025, which highlighted the $410 million cash gain from its Allo investment and the company’s disciplined, Berkshire-like capital allocation strategy. The company’s stock price has appreciated approximately 10% since our coverage. The thesis still stands as Nelnet continues to generate strong cash flow. Brian Coughlin shares a similar perspective but emphasizes the management’s conservative accounting approach, valuing unrealized stakes at zero to preserve upside while keeping expectations grounded.

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Disclosure: None.