Afya Ltd. (AFYA), via its subsidiary Afya Partcipacoes S.A., acquired CardioPapers, which is a medical content and education platform in Cardiology and provides courses as well as books that cover all aspects of the medical field. The move is in sync with Afya’s bigger business strategy.
CardioPapers expects to garner R$18.8 million in gross revenue in 2022. The company has 7,000 students in 2021.
Shares of Brazilian medical education group Afya Ltd. (AFYA) have gained 18.5% over the past month.
Notably, the move brings in new capabilities in content and technology for Afya while also bolstering its digital ecosystem.
Afya acquired CardioPapers at an enterprise value of R$35 million in an all-cash transaction. Additionally, depending on the business achieving certain revenue and other goals, Afya may pay an earn-out of up to R$15 million as well.
UBS analyst Vinicius Ribeiro has reiterated a Buy rating on the stock alongside a price target of $21, implying a potential upside of 51% for the stock. Overall, the Street has a Moderate Buy consensus rating on Afya based on two unanimous Buys. The average Afya price target of $20 implies a potential 43.9% upside for the stock.
Now let’s have a look at some of the key metrics for Afya and how it fares against the broader industry. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 32.3% outperforms the industry median of 12.7%, implying that the company has a better-optimized cost structure.
On the other hand, Afya’s return on common equity of 7.8% substantially lags the industry median of 17.2%, implying that the company has scope to better utilize its capital. A similar trend is echoed in Afya’s net income per employee of $7,615, which falls short of the industry median of $17,280.
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