Afya (AFYA) AI Stock Analysis

• Market Cap: $1.66B
• Dividend Yield: <0.01%
• Average Volume (3M): 96.90K
• Price to Earnings (P/E): 14.1
• Beta (1Y): 0.76
• Revenue Growth: 6.73%
• EPS Growth: 53.37%
• Country: US
• Employees: 5,260
• Sector: Healthcare
• Sector Strength: 64
• Industry: Education & Training Services
• EPS (TTM): 1.32
• Shares Outstanding: 46,390,125
• 10 Day Avg. Volume: 80,044
• 30 Day Avg. Volume: 96,896
• PEG Ratio: 0.27
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.26
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $18.50
• Price Target Upside: 0.54% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 5

Afya demonstrates strong financial performance with robust revenue and profitability growth, and solid cash flow metrics. Technical indicators suggest positive short-term momentum, although a lack of comprehensive technical analysis data and low dividend yield slightly temper the overall score. The stock is well-valued, appealing to growth-focused investors.

Positive Factors

Dividend

For the first time Afya announced a dividend payment, representing a 20% payout ratio and 1.5% dividend yield.

Financial Performance

Afya reported solid results with sustained double-digit growth on revenues and Adj. EBITDA margin at 43%.

Guidance

The positive highlight was the strong guidance for 2025, which implies an 11% to 14% YoY growth on net revenues and EBITDA margin expansion.

Negative Factors

Debt

Net debt remained flat despite the acquisitions payment of ~R$820mn, with an increased cost reflecting the cost increase of Softbank debt.

Interest Expenses

The bottom line is below consensus due to higher interest expenses from M&A activities.

Supply Expansion

The supply expansion in the industry may lead to longer-term ticket deterioration.

Afya Business Overview & Revenue Model

Company Description

Afya Limited, through its subsidiaries, operates as a medical education group in Brazil. It offers educational products and services, including medical schools, medical residency preparatory courses, graduate courses, and other programs to lifelong medical learners enrolled across its distribution network, as well as to third-party medical schools. The company also provides digital health services, such as subscription-based mobile app and website portal that focuses on assisting health professionals and students with clinical decision-making through tools, such as medical calculators, charts, and updated content, as well as prescriptions, clinical scores, medical procedures and laboratory exams, and others. It offers health sciences courses, which comprise medicine, dentistry, nursing, radiology, psychology, pharmacy, physical education, physiotherapy, nutrition, and biomedicine; and degree programs and courses in other subjects and disciplines, including undergraduate and post graduate courses in business administration, accounting, law, civil engineering, industrial engineering, and pedagogy. In addition, the company provides medical postgraduate specialization programs; printed and digital content; and an online medical education platform and practical medical training services. As of December 31, 2021, it operated a network of 46 undergraduate and graduate medical school campuses consisted of 30 undergrad operating units and five approved units; and a network of 2,731 medical school seats that consisted of 2,481 operating seats and 278 approved seats. The company was founded in 1999 and is headquartered in Nova Lima, Brazil.

How the Company Makes Money

Afya primarily makes money through tuition fees from its educational programs, which form the largest part of its revenue stream. The company offers a wide range of undergraduate and graduate programs in medicine and other healthcare disciplines, attracting a significant number of students each year. In addition to tuition fees, Afya generates revenue from its digital healthcare services and educational content, which provide supplementary income. Significant partnerships with healthcare institutions and continuous expansion of its educational offerings contribute to its earnings, enhancing its market position in the Brazilian medical education sector.

Afya Financial Statement Overview

Summary

Afya's financial health is robust, with strong revenue growth, profitability, and cash flow generation. The company effectively manages its leverage while maintaining high margins and returns, indicative of a well-executed business strategy. Its balance sheet reflects stability with a healthy equity position, and cash flow metrics underscore its strong liquidity profile. Overall, Afya is well-positioned for continued growth and financial success.

Income Statement

Afya has demonstrated robust growth in total revenue, showcasing a consistent upward trend over the years. The company achieved a gross profit margin of 63.22% and a net profit margin of 19.11% in 2024, indicating strong profitability. EBIT and EBITDA margins are also healthy at 30.63% and 36.86%, respectively, reflecting efficient operational management. Revenue growth rate from 2023 to 2024 is significant at 14.90%, reinforcing its strong market position.

Balance Sheet

Afya maintains a strong balance sheet with a debt-to-equity ratio of 0.74, suggesting prudent leverage management. The return on equity (ROE) is impressive at 14.79% for 2024, demonstrating effective use of shareholders' funds. The equity ratio stands at 48.35%, indicating a solid equity base supporting its assets. The company’s financial stability is evident in its strategic management of liabilities and equity.

Cash Flow

The company's cash flow is robust, with an operating cash flow to net income ratio of 2.27 in 2024, highlighting strong cash-generating capacity. Free cash flow grew by 62.26% from 2023 to 2024, showcasing enhanced liquidity and capacity for reinvestment or debt reduction. The free cash flow to net income ratio is 2.05, underscoring the company's ability to convert income into cash efficiently.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.30B	2.88B	2.33B	1.72B	1.20B
	Gross Profit
2.09B	1.77B	1.47B	1.07B	766.54M
	EBIT
1.01B	767.06M	664.10M	440.89M	363.33M
	EBITDA
1.22B	1.11B	856.35M	541.80M	433.11M
	Net Income Common Stockholders
631.51M	386.32M	373.57M	223.33M	292.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
911.01M	553.03M	1.09B	748.56M	1.05B
	Total Assets
8.83B	7.58B	7.20B	6.45B	4.79B
	Total Debt
3.17B	2.68B	2.71B	2.16B	1.14B
	Net Debt
2.26B	2.12B	1.62B	1.41B	96.33M
	Total Liabilities
4.52B	3.94B	3.95B	3.45B	1.96B
	Stockholders Equity
4.27B	3.60B	3.20B	2.95B	2.78B
Cash Flow		Free Cash Flow
1.30B	798.20M	546.88M	354.07M	233.92M
	Operating Cash Flow
1.43B	1.04B	843.90M	630.87M	371.51M
	Investing Cash Flow
-1.09B	-1.14B	-591.47M	-1.27B	-1.04B
	Financing Cash Flow
23.97M	-439.94M	92.94M	364.68M	756.42M

Afya Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 18.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFYA, the sentiment is Positive. The current price of 18.4 is above the 20-day moving average (MA) of 17.84, above the 50-day MA of 17.33, and above the 200-day MA of 16.71, indicating a bullish trend. The MACD of 0.27 indicates Negative momentum. The RSI at 60.59 is Neutral, neither overbought nor oversold. The STOCH value of 82.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AFYA.

Afya Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AFYA	84 Outperform	$1.66B	14.15	16.58%	<0.01%	6.73%	53.37%
PRDO	75 Outperform	$1.59B	11.04	16.39%	2.06%	-4.05%	1.50%
UTI	74 Outperform	$1.39B	26.24	21.41%	―	14.70%	275.89%
STRA	72 Outperform	$1.94B	16.87	6.80%	3.05%	7.68%	61.28%
COUR	69 Neutral	$1.15B	―	-13.11%	―	9.27%	34.66%
KLC	55 Neutral	$1.38B	35.79	-13.54%	―	6.09%	-191.19%
Sector *	51 Neutral	$5.20B	3.18	-40.80%	2.96%	17.66%	1.94%