Afya (AFYA) AI Stock Analysis

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Afya

(NASDAQ:AFYA)

84Outperform

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 Announcement

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

Financial Performance

Adjusted EBITDA increased by 24% year over year and was above consensus estimates.

Guidance and Growth

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 Increase

Net debt increased R$488mn QoQ following Unidom acquisition in July.

Residency Courses Decline

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

Tax Regulation Impact

New tax rule could harm future cash flow.

Afya (AFYA) vs. S&P 500 (SPY)

Market Cap

$1.77B

Dividend Yield<0.01%

Average Volume (3M)120.37K

Price to Earnings (P/E)14.6

Beta (1Y)0.74

Revenue Growth1.79%

EPS Growth24.44%

CountryUS

Employees5,260

SectorHealthcare

Sector Strength46

IndustryEducation & Training Services

Share Statistics

EPS (TTM)0.57

Shares Outstanding46,586,056

10 Day Avg. Volume151,453

30 Day Avg. Volume120,373

Financial Highlights & Ratios

PEG Ratio1.45

Price to Book (P/B)2.36

Price to Sales (P/S)0.00

P/FCF Ratio9.63

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$21.83

Price Target Upside11.32% Upside

Rating ConsensusHold

Number of Analyst Covering3

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 health is robust, with strong revenue growth, high profitability margins, and excellent cash flow generation. The company manages its leverage well while maintaining high returns. Its balance sheet reflects stability and a strong equity position, making it well-positioned for continued growth.

Income Statement

Very Positive

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

Very Positive

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

Very Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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 Price19.61

Price Trends

50DMA

17.81

Positive

100DMA

16.86

Positive

200DMA

16.79

Positive

Market Momentum

MACD

0.49

Negative

RSI

66.42

Neutral

STOCH

85.45

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 19.61 is above the 20-day moving average (MA) of 18.65, above the 50-day MA of 17.81, and above the 200-day MA of 16.79, indicating a bullish trend. The MACD of 0.49 indicates Negative momentum. The RSI at 66.42 is Neutral, neither overbought nor oversold. The STOCH value of 85.45 is Negative, 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 (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AFYA	84 Outperform	$1.77B	14.65	15.78%	<0.01%	1.79%	24.44%
PRDO	77 Outperform	$2.04B	13.74	16.54%	1.61%	6.35%	0.35%
UTI	75 Outperform	$1.87B	33.11	21.81%	―	14.69%	188.00%
STRA	73 Outperform	$2.12B	18.44	6.86%	2.69%	5.72%	11.02%
COUR	73 Outperform	$1.45B	―	-10.84%	―	7.26%	39.62%
KLC	55 Neutral	$1.52B	35.79	-13.54%	―	6.09%	-191.19%
Sector *	52 Neutral	$5.15B	3.56	-42.52%	2.83%	14.56%	-0.50%

* Healthcare Sector Average

Performance Comparison

AFYA

Afya

19.61

1.36

7.45%

PRDO

Perdoceo Education

31.06

7.68

32.85%

STRA

Strategic Education

89.26

-28.44

-24.16%

UTI

Universal Technical Institute

34.33

19.34

129.02%

COUR

Coursera

8.96

0.27

3.11%

KLC

KinderCare Learning Companies Inc

13.18

-14.86

-53.00%

Afya Earnings Call Summary

Earnings Call Date:May 09, 2025

(Q3-2024)

% Change Since: 1.08%|

Next Earnings Date:Aug 14, 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.

Q3-2024 Updates

Positive Updates

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.

Negative Updates

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.