Afya (AFYA) AI Stock Analysis

• Market Cap: $1.36B
• Dividend Yield: <0.01%
• Average Volume (3M): 114.97K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.73
• Revenue Growth: 1.02%
• EPS Growth: 9.06%
• Country: US
• Employees: 5,260
• Sector: Consumer Defensive
• Sector Strength: 46
• Industry: Education & Training Services
• EPS (TTM): 0.42
• Shares Outstanding: 46,586,056
• 10 Day Avg. Volume: 97,892
• 30 Day Avg. Volume: 114,969
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 0.57
• Enterprise Value/Gross Profit: 0.89
• Enterprise Value/Ebitda: 1.33
• 1Y Price Target: $19.90
• Price Target Upside: 31.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 76 Outperform
• Price Target: $17.00 ▲(12.58% Upside)

Afya's strong financial performance and positive earnings call are the primary drivers of its overall score. The company's robust revenue growth and strategic initiatives, such as the share repurchase program, enhance its attractiveness. However, technical analysis indicates potential bearish momentum, and the low dividend yield limits income potential. Overall, Afya presents a solid investment opportunity with some caution advised due to technical signals.

Positive Factors

Earnings

Despite a higher tax rate than expected, Afya achieved a solid net income beat driven by greater efficiency on SG&A from shared services among different segments and better financial results.

Revenue Growth

Net revenue increased by 14% year-over-year, driven by growth in the undergraduate segment, especially in the medical school sector.

Share Buyback

Afya announced a buyback program of up to 4 million shares, which could pressure its already low shares liquidity.

Negative Factors

Industry Competition

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

Market Demand

Residency prep courses continue to lose students with a decline of 17% year over year.

Tax Impact

Management sees risks for the tax rate to increase due to OECD minimum tax impacts, which could affect future profitability.

Afya Business Overview & Revenue Model

Company Description

Afya (AFYA) is a leading healthcare education company based in Brazil, primarily focused on providing medical education and training services. The company operates within the healthcare sector, offering a range of products and services that include medical courses, digital education platforms, and educational technology solutions designed for healthcare professionals and students. Afya aims to enhance the quality of healthcare education in Brazil by integrating technology into the learning process, thus addressing the growing demand for skilled healthcare workers in the region.

How the Company Makes Money

Afya generates revenue through several key streams, primarily from tuition fees for its educational programs, which include undergraduate and postgraduate courses in medicine and healthcare. The company also earns income from the sale of digital educational materials and subscriptions to its online learning platforms. Additionally, Afya has established strategic partnerships with various institutions and organizations, which help expand its reach and enhance its offerings. The growing emphasis on continuing education in the healthcare field and the increasing demand for qualified healthcare professionals in Brazil further contribute to Afya's revenue growth.

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.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.55B	3.30B	2.88B	2.33B	1.72B	1.20B
Gross Profit	2.29B	2.09B	1.77B	1.47B	1.07B	766.54M
EBITDA	1.53B	1.22B	1.11B	856.35M	541.80M	433.11M
Net Income	694.24M	631.51M	386.32M	373.57M	223.33M	292.07M
Balance Sheet
Total Assets	9.24B	8.83B	7.58B	7.20B	6.45B	4.79B
Cash, Cash Equivalents and Short-Term Investments	1.10B	911.01M	553.03M	1.09B	748.56M	1.05B
Total Debt	3.23B	3.17B	2.68B	2.71B	2.16B	1.14B
Total Liabilities	4.60B	4.52B	3.94B	3.95B	3.45B	1.96B
Stockholders Equity	4.60B	4.27B	3.60B	3.20B	2.95B	2.78B
Cash Flow
Free Cash Flow	1.10B	1.30B	798.20M	546.88M	354.07M	233.92M
Operating Cash Flow	1.54B	1.43B	1.04B	843.90M	630.87M	371.51M
Investing Cash Flow	-1.04B	-1.09B	-1.14B	-591.47M	-1.27B	-1.04B
Financing Cash Flow	-108.12M	23.97M	-439.94M	92.94M	364.68M	756.42M

Afya Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 15.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFYA, the sentiment is Neutral. The current price of 15.1 is above the 20-day moving average (MA) of 14.78, below the 50-day MA of 15.65, and below the 200-day MA of 16.69, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 50.31 is Neutral, neither overbought nor oversold. The STOCH value of 39.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AFYA.

Afya Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRDO	78 Outperform	$2.12B	14.15	16.39%	1.60%	15.99%	13.25%
AFYA	76 Outperform	$1.36B	11.24	15.50%	<0.01%	1.02%	9.06%
STRA	76 Outperform	$1.94B	17.02	6.89%	2.94%	4.31%	-1.08%
COUR	73 Outperform	$1.82B	―	-8.40%	―	7.10%	49.18%
UTI	71 Outperform	$1.44B	23.31	23.11%	―	14.56%	127.02%
Sector *	63 Neutral	$20.46B	14.47	-3.60%	3.13%	2.63%	-6.18%
KLC	52 Neutral	$858.75M	35.79	-10.31%	―	3.85%	-208.51%