Mauricio Cepeda, an analyst from Morgan Stanley, maintained the Hold rating on Afya. The associated price target is $17.50.
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Mauricio Cepeda has given his Hold rating due to a combination of factors influencing Afya’s current and future performance. The company reported a 10% year-over-year increase in revenue, primarily driven by its Undergraduate segment, with Continuing Education also showing robust growth. However, the Medical Practice Solutions segment continues to lag, growing at a slower pace.
Despite the positive revenue trends, the company’s future growth prospects are tempered by potential challenges such as the impact of undergraduate oversupply, which could take years to fully materialize. Additionally, while margins have improved due to cost efficiencies, the effective tax rate is expected to rise, potentially impacting net income. These factors contribute to a cautious outlook, justifying the Hold rating as the company navigates these challenges.
According to TipRanks, Cepeda is an analyst with an average return of -4.5% and a 35.71% success rate.