$2.76
$21.27
bear $2.76
base $14.51
bull $21.27
margin of safety $6.50
market price* $10.03
NerdWallet is a personal-finance website and app that earns fees when consumers and small businesses it steers to a partner sign up for something: credit cards, personal and business loans, mortgages, insurance, and bank accounts. Fees are paid per approved action, click, lead or funded loan. 2025 revenue was $836.6 million: Insurance $280.8M, Emerging verticals (mostly banking) $189.0M, Credit cards $133.4M, Loans $133.4M and small-business products $100.0M. How we measure earnings. We start with operating cash flow, remove the swings from working capital, and deduct stock compensation as a real cost. We also deduct the part of spending on software development and equipment needed to keep the product running, rather than growth spending. NerdWallet capitalizes software development ($16.9M in 2025), and we treat that as a genuine cost of staying in business. On that basis earnings per share were roughly $0.34 in 2024 and $1.38 in 2025, versus $0.20 in 2023 and roughly break-even in 2021-2022. The jump is real but has two flattering elements. First, 2025 cash income taxes were only $3.5M versus $20.7M in 2024, because a 2025 tax law change allowed immediate expensing of domestic research costs and unwound a deferred tax asset (from $55.5M to $30.4M). Book tax expense was $19.5M, so we treat roughly $16M of 2025 cash flow as a timing benefit and use a normalized 2025 owner earnings of about $88.6M in our base case (about $1.35 per share on the roughly 65.8 million diluted shares reported for the second quarter of 2026). Second, 2025 was a strong year for auto insurance advertising: Insurance revenue rose from $45.0M in 2023 to $191.6M in 2024 and $280.8M in 2025 as carriers expanded budgets, and carrier budgets are discretionary. Why we moved the earnings level up from the three-year median. Operating income went from $9.4M in 2024 to $65.2M in 2025, and the first half of 2026 corroborates it: net income $24.7M versus $8.4M, and operating cash flow $76.9M versus $44.2M, on revenue up only about 6% ($419.5M versus $396.1M). Revenue growth has slowed sharply from 22% in 2025, so we credit no growth at all. Owner earnings grew about 306% per share in 2025; our base case assumes a 3% decline in the first year, well below that trailing rate, because nothing in the filings secures further growth. What weighs on the business. Nearly all traffic depends on internet search, particularly Google, and the company itself flags that AI-assisted search could reduce its ranking and traffic. The damage is visible: Credit cards revenue fell 24% in 2025 (from $176.4M) and 16% in 2024 (from $209.7M) on organic-search pressure; small-business products fell 9%. Together these lines are $233M, about 28% of revenue, and shrinking. Growth elsewhere (personal loans +85%, banking +60%, mortgages helped by the October 2024 acquisition of NDL) comes from partners' demand and new categories, which we do not treat as secured. Bear case: $2.76 per share. Insurance budgets pull back as they did before 2023 and search traffic erosion continues, taking owner earnings back to roughly the 2023-2024 average of about $21M a year, then declining 5% a year. Basis: the 2023 and 2024 results actually reported, and the credit-card decline already under way. Base case: $14.51 per share. Normalized 2025 owner earnings of about $88.6M declining 3% a year, reflecting continued erosion in credit cards and small-business products with no credit for growth in insurance, loans or banking. We stretch that decline out indefinitely, because we can point to no specific driver that stabilizes earnings, but the brand and audience have persisted for years. Bull case: $21.27 per share. The reported 2025 level of about $104.6M, helped by the first half of 2026 cash generation, holds flat for ten years and then declines 3% a year. We do not assume any growth in this case either. All cases are discounted at 6% a year and no adjustment is made for cash: the company had $98.3M of cash at year-end 2025 and no borrowings shown on its balance sheet, so financial risk is low and leverage plays no part in the bear case. Share repurchases reduced the share count from 74.1M at the end of 2024 to 71.3M at the end of 2025 and roughly 65.8M diluted in the second quarter of 2026, which lifts per-share value only if the shares were bought below value. What could prove this wrong. On the downside, a further Google ranking change or AI answers that bypass the site would cut all categories, not just credit cards. On the upside, if insurance, loans and banking revenue hold while credit cards stabilize, earnings would sit near the bull case. The company's disclosure of revenue by category and reported cash taxes could not be fully reconciled to 2026 quarterly detail, since the 2026 filing was reviewed only at summary level. Margin-of-safety price: $6.50, about 55% below our base value, reflecting a cyclical revenue mix, dependence on one search engine, a history of near-zero earnings as recently as 2022, and a low bear case.