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Afya (AFYA)
NASDAQ:AFYA
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Afya
(NASDAQ:AFYA)
84Outperform
Positive Factors
Dividend
For the first time Afya announced a dividend payment, representing a 20% payout ratio and 1.5% div. 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
Bottom Line Performance
The bottom line is below consensus due to higher interest expenses from M&A activities.
Debt
Net debt remained flat despite the acquisitions payment of ~R$820mn, with an increased cost reflecting the cost increase of Softbank debt.
Market Supply
The supply expansion in the industry may lead to longer-term ticket deterioration.
Afya (AFYA) vs. S&P 500 (SPY)
Market Cap
$1.61B
Dividend YieldN/A
Average Volume (3M)98.01K
Price to Earnings (P/E)13.6
Beta (1Y)0.93
Revenue Growth6.73%
EPS Growth53.37%
CountryUS
Employees5,260
SectorHealthcare
Sector Strength71
IndustryEducation & Training Services
Share Statistics
EPS (TTM)1.32
Shares Outstanding46,390,125
10 Day Avg. Volume94,561
30 Day Avg. Volume98,010
Financial Highlights & Ratios
PEG Ratio0.25
Price to Book (P/B)N/A
Price to Sales (P/S)3.26
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.50Price Target Upside-2.07% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering4
Afya Business Overview & Revenue Model
Company DescriptionAfya (AFYA) is a leading medical education group in Brazil, focused on providing educational solutions and healthcare services. The company operates in the education sector, offering undergraduate and graduate courses primarily in medicine and healthcare-related fields. Afya's core products and services include medical education programs, digital healthcare solutions, and other educational content tailored to meet the needs of healthcare professionals.
How the Company Makes MoneyAfya 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 position is strong with robust revenue growth, improving profit margins, and effective cash flow management. The moderate debt-to-equity ratio and healthy equity ratio are points of attention, but are mitigated by solid cash flow and operational performance.Income Statement
Afya shows strong revenue growth with a 10.75% increase in TTM compared to last year and consistent gross profit margins around 60-62%. Net profit margin improved significantly to 18.20% in TTM from 13.43% last year. EBIT and EBITDA margins are robust, indicating efficient operations and profit generation.85
Very Positive
Balance Sheet
The company maintains a moderate debt-to-equity ratio of 0.76 and a healthy equity ratio of 47.17% in TTM. Return on equity improved to 14.10%, showing enhanced profitability. However, the increase in total debt could pose a leverage risk if not managed carefully.78
Positive
Cash Flow
Afya demonstrates strong cash flow management with a 11.23% growth in free cash flow and a high operating cash flow to net income ratio of 2.23 in TTM. The company's ability to generate free cash flow consistently supports its financial stability and operational flexibility.88
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.19B | 2.88B | 2.33B | 1.72B | 1.20B | 750.63M | Gross Profit |
| 1.96B | 1.77B | 1.47B | 1.07B | 766.54M | 441.78M | EBIT |
| 924.66M | 767.06M | 664.10M | 440.89M | 363.33M | 205.25M | EBITDA |
| 1.13B | 1.11B | 856.35M | 541.80M | 433.11M | 257.75M | Net Income Common Stockholders |
| 579.64M | 386.32M | 373.57M | 223.33M | 292.07M | 153.92M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 62.26M | 553.03M | 1.09B | 748.56M | 1.05B | 943.21M | Total Assets |
| 918.42M | 7.58B | 7.20B | 6.45B | 4.79B | 2.91B | Total Debt |
| 77.83M | 2.68B | 2.71B | 2.16B | 1.14B | 344.87M | Net Debt |
| 15.57M | 2.12B | 1.62B | 1.41B | 96.33M | -598.34M | Total Liabilities |
| 328.06M | 3.94B | 3.95B | 3.45B | 1.96B | 798.73M | Stockholders Equity |
| 501.98M | 3.60B | 3.20B | 2.95B | 2.78B | 2.07B |
| Cash Flow | Free Cash Flow | ||||
| 887.87M | 798.20M | 546.88M | 354.07M | 233.92M | 177.51M | Operating Cash Flow |
| 1.29B | 1.04B | 843.90M | 630.87M | 371.51M | 299.22M | Investing Cash Flow |
| -1.18B | -1.14B | -591.47M | -1.27B | -1.04B | -354.15M | Financing Cash Flow |
| -94.48M | -439.94M | 92.94M | 364.68M | 756.42M | 921.43M |
Afya Technical Analysis
Positive
17.87
Price Trends
16.72
Positive
16.34
Positive
16.61
Positive
Market Momentum
0.38
Negative
60.54
Neutral
56.30
Neutral
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 17.87 is above the 20-day moving average (MA) of 17.13, above the 50-day MA of 16.72, and above the 200-day MA of 16.61, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 60.54 is Neutral, neither overbought nor oversold. The STOCH value of 56.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AFYA.
Afya Risk Analysis
Afya disclosed 69 risk factors in its most recent earnings report. Afya reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Afya Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $1.61B | 13.56 | 16.58% | ― | 6.73% | 53.37% | |
78 Outperform | $3.80B | 19.03 | 14.63% | ― | 12.83% | 97.16% | |
73 Outperform | $5.03B | 22.61 | 30.13% | ― | 7.50% | 13.70% | |
72 Outperform | $4.16B | 5.83 | 17.48% | 0.73% | 8.52% | 281.17% | |
68 Neutral | $2.11B | 18.35 | 6.80% | 2.80% | 7.68% | 61.28% | |
49 Neutral | $6.85B | 0.81 | -52.91% | 2.50% | 19.94% | 1.20% | |
47 Neutral | $69.68M | ― | -147.16% | ― | -13.78% | -5297.96% |
* Healthcare Sector Average
Performance Comparison
AFYA
Afya
17.87
-0.42
-2.30%
ATGE
Adtalem Global Education
102.10
49.76
95.07%
LOPE
Grand Canyon Education
174.94
37.59
27.37%
STRA
Strategic Education
85.66
-15.68
-15.47%
CHGG
Chegg
0.66
-6.56
-90.86%
GHC
Graham Holdings
952.89
203.51
27.16%
Afya Earnings Call Summary
Earnings Call Date: Mar 13, 2025 | % Change Since: 11.62% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong positive sentiment with notable achievements in revenue growth, operational expansions, and successful acquisitions. There are minor challenges, such as the decrease in digital service users and integration issues with Unidom, but these are outweighed by the positive financial and operational performance.Highlights
Strong Financial Performance
Net revenue grew 16% year-over-year, reaching BRL 841 million. Adjusted EBITDA grew 25% year-over-year, reaching BRL 348 million with a margin of 41.4%. Adjusted net income increased by 29% year-over-year, reaching BRL 165 million.
Operational Achievements
Afya reached 3,593 approved medical seats with acquisitions and approvals, and the number of undergrad medical students grew over 12% compared to last year.
Continuing Education and Medical Practice Solutions Growth
Continuing Education segment saw a net revenue growth of 10.4% year-over-year, reaching BRL 188 million. Medical Practice Solutions segment had a 15% revenue increase year-over-year.
Successful M&A Activity
Completed the acquisition of Unidom, adding 300 medical seats and expanding presence in Salvador.
Lowlights
Decrease in Monthly Active Users
Monthly active users in the digital services segment decreased by 4%, attributed to the transition to the Afya portal.
Challenges in Unidom Integration
Unidom's integration challenges include reaching full occupancy and integrating legacy systems, although improvements are expected.
Company Guidance
During the AFYA Q3 2024 earnings call, the executives highlighted a robust financial performance, with a 16% year-over-year increase in net revenue, reaching BRL 841 million. Adjusted EBITDA rose by 25% to BRL 348 million, yielding a 41.4% margin. The company achieved an adjusted net income of BRL 165 million, marking a 29% increase from the previous year, and an adjusted EPS of BRL 1.79, up 30%. Cash flow from operations was strong, totaling BRL 1.167 billion for the 9-month period, which is a 25% increase compared to the previous year, with a cash conversion rate of 109.7%. The call also covered strategic M&A activity, including the BRL 660 million acquisition of Unidom, which contributed to the growth of approved medical seats by 14% year-over-year. The Continuing Education segment showed a net revenue growth of 10.4%, and the Medical Practice Solutions segment reported a 15% increase in net revenue year-over-year. The call concluded with discussions on operational efficiencies, future M&A strategies, and a disciplined approach to capital allocation.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.