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Afya
(NASDAQ:AFYA)
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Rating:74Outperform
Price Target:
$15.00
▲(4.53% Upside)
Action:Reiterated
Date:10/06/26
AFYA’s score is driven primarily by strong fundamental profitability and generally solid cash generation, supported by an attractive valuation (low P/E and ~4.93% dividend yield). The main constraints are mixed technicals (below key moving averages with negative MACD) and execution/near-term margin risks highlighted on the earnings call, including investment-driven margin contraction and a high cost of debt.
Positive Factors
Medical education growth
Afya’s core undergraduate medical franchise continues to expand through higher student enrollment, operating capacity, and tuition tickets. This supports recurring multi-year revenue, strengthens the company’s position in medical training, and provides a durable base for continued cash generation.
Negative Factors
Investment-driven margin pressure
The current investment cycle is reducing near-term profitability as Afya spends more on continued education and medical practice solutions. If these initiatives take longer to mature, elevated costs could keep margins below recent levels and delay operating leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Medical education growth
Afya’s core undergraduate medical franchise continues to expand through higher student enrollment, operating capacity, and tuition tickets. This supports recurring multi-year revenue, strengthens the company’s position in medical training, and provides a durable base for continued cash generation.
Read all positive factors
Afya (AFYA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.35B
Dividend Yield4.45%
Average Volume (3M)444.56K
Price to Earnings (P/E)8.4
Beta (1Y)0.50
Revenue Growth16.99%
EPS Growth23.72%
CountryUS
Employees9,395
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)8.74
Shares Outstanding52,878,490
10 Day Avg. Volume634,430
30 Day Avg. Volume444,558
Financial Highlights & Ratios
PEG Ratio0.63
Price to Book (P/B)1.57
Price to Sales (P/S)2.11
P/FCF Ratio7.37
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue0.45
Enterprise Value/Gross Profit0.71
Enterprise Value/Ebitda1.06
Forecast
1Y Price Target
$18.00Price Target Upside25.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)9.05
Revenue Forecast (FY)$3.98B
Afya Business Overview & Revenue Model
Company Description
Afya Limited, operating through its subsidiaries, is a prominent medical education provider in Brazil. The company delivers a comprehensive array of educational products and services primarily focused on the medical field, encompassing medical sch...
How the Company Makes Money
Afya primarily makes money by charging tuition and education-related fees across its medical education ecosystem. The largest revenue driver is typically its undergraduate medical education business, where students pay recurring tuition for multi-...
Afya Earnings Call Summary
Earnings Call Date:Aug 13, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Positive
The call presented a predominately positive operational and financial picture: revenue, net income, EPS, cash flow and several unit-growth metrics (medical seats, students, clinical management payers) all improved year-over-year. However, near-term margin pressure driven by an investment cycle, a mix-driven slowdown in continued education revenue despite strong student growth, engagement softness in some product lines (Whitebook monthly users) and a relatively high cost of debt introduce tangible execution and timing risks. On balance the company shows resilient cash generation, conservative leverage and active capital returns while investing for future growth.Positive Updates
Revenue Growth
Revenue for the first half of 2026 reached BRL 1.985 billion, up 7% year-over-year; second-quarter revenue was BRL 972 million, up 6% year-over-year.
Negative Updates
Margin Contraction Due to Investment Cycle
Adjusted EBITDA margin contracted ~190 basis points YoY to 46.2% for the six-month period (Q2 margin 41.8%), primarily reflecting lower gross profit contribution from continued education and higher sales & marketing and product investment across continued education and medical practice solutions.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Revenue for the first half of 2026 reached BRL 1.985 billion, up 7% year-over-year; second-quarter revenue was BRL 972 million, up 6% year-over-year.
Read all positive updates
Company Guidance
Management maintained full‑year adjusted EBITDA guidance of BRL 1.7–1.8 billion (H1 adjusted EBITDA BRL 918m; Q2 BRL 470m), with H1 revenue BRL 1.985 billion (up 7% YoY) and Q2 revenue BRL 972m (up 6%); CapEx guidance remains BRL 340–380m (H1 spent ~30% of guidance, with acceleration expected in H2); they expect an effective tax rate around 10% for 2026 after a ~BRL 20m Pillar Two benefit. Balance‑sheet and cash metrics supporting the guidance include net debt BRL 1,394m (net debt/EBITDA ex‑IFRS16 0.8x), gross debt BRL 2.4bn with average cost 15.1% and duration 3.7 years, operating cash flow BRL 806m (up 3% YoY) and H1 free cash flow to equity BRL 423m; capital returned to shareholders totaled BRL 448m in H1 (106% of FCFE), including BRL 307m in Q2 dividends (40% of 2025 net income) and 2.6m shares repurchased of a 4m program (1.4m remaining). Management reiterated targeted outcomes for continuing education (high single‑digit growth in H2), a disciplined M&A threshold (minimum ~20% unlevered IRR), and the aim to maintain conservative leverage while executing product and investment initiatives.Afya Financial Statement Overview
Summary
Income Statement
88
Very Positive
Balance Sheet
74
Positive
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.84B | 3.62B | 3.30B | 2.88B | 2.33B | 1.72B |
| Gross Profit | 2.46B | 2.34B | 2.09B | 1.77B | 1.47B | 1.07B |
| EBITDA | 1.64B | 1.34B | 1.35B | 1.11B | 923.30M | 603.33M |
| Net Income | 784.56M | 737.68M | 631.51M | 386.32M | 373.57M | 223.33M |
Balance Sheet | ||||||
| Total Assets | 9.31B | 9.35B | 8.83B | 7.58B | 7.20B | 6.45B |
| Cash, Cash Equivalents and Short-Term Investments | 1.00B | 1.12B | 911.01M | 553.03M | 1.09B | 748.56M |
| Total Debt | 3.11B | 3.12B | 3.17B | 2.68B | 2.71B | 2.16B |
| Total Liabilities | 4.39B | 4.46B | 4.52B | 3.94B | 3.95B | 3.45B |
| Stockholders Equity | 4.88B | 4.85B | 4.27B | 3.60B | 3.20B | 2.95B |
Cash Flow | ||||||
| Free Cash Flow | 1.16B | 1.04B | 1.04B | 798.20M | 546.88M | 354.07M |
| Operating Cash Flow | 1.32B | 1.20B | 1.43B | 1.04B | 843.90M | 630.87M |
| Investing Cash Flow | -488.25M | -498.11M | -1.09B | -1.14B | -591.47M | -1.27B |
| Financing Cash Flow | -926.54M | -489.20M | 23.97M | -439.94M | 92.94M | 364.68M |
Afya Technical Analysis
Positive
14.35
Price Trends
13.76
Positive
14.04
Positive
14.12
Positive
Market Momentum
>-0.01
Negative
65.37
Neutral
93.50
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 14.35 is above the 20-day moving average (MA) of 13.30, above the 50-day MA of 13.76, and above the 200-day MA of 14.12, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 65.37 is Neutral, neither overbought nor oversold. The STOCH value of 93.50 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
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.83B | 13.40 | 8.19% | 2.91% | 3.53% | 23.97% | |
75 Outperform | $2.11B | 12.08 | 17.70% | 1.84% | 11.68% | 18.98% | |
74 Outperform | $1.35B | 8.40 | 16.38% | 4.45% | 16.99% | 23.72% | |
74 Outperform | $5.44B | 17.78 | 28.61% | 5.23% | 17.89% | 31.70% | |
73 Outperform | $4.17B | 19.21 | 31.24% | ― | 6.97% | 0.18% | |
72 Outperform | $937.59M | 11.26 | 29.02% | 2.42% | 2.39% | -34.68% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
AFYA
Afya
14.85
1.04
7.54%
PRDO
Perdoceo Education
33.73
-0.10
-0.29%
LOPE
Grand Canyon Education
160.28
-47.43
-22.83%
STRA
Strategic Education
81.95
5.80
7.62%
LAUR
Laureate Education
39.59
10.31
35.21%
PXED
Phoenix Education Partners, Inc.
24.35
-12.09
-33.17%
Afya Corporate Events
Afya and YDUQS Sign Merger Deal to Create Integrated Brazilian Education Group
Oct 1, 2026
On September 23, 2026, Afya Limited and Brazilian higher education group YDUQS Participações S.A. signed a merger agreement to combine their operations, with YDUQS to be the surviving entity listed on B3’s Novo Mercado. The transac...
Afya Shareholders Sign Voting Pact to Back Merger into YDUQS
Oct 1, 2026
On September 23, 2026, Afya Limited and YDUQS Participações S.A. signed a voting commitment agreement alongside major shareholders from both groups to support a planned business combination. The agreement aligns key investors, including ...
Afya and Yduqs Seal Merger Deal to Create Brazilian Higher Education Powerhouse
Sep 24, 2026
On September 23, 2026, Afya Limited announced a binding merger agreement with Yduqs Participações S.A. to combine their Brazilian higher education operations, with Afya merging into Yduqs and the surviving combined company listed exclusi...
Afya Secures MEC Approval to Expand Medical Seats at Cruzeiro do Sul Campus
Sep 18, 2026
Afya Limited, a Brazilian medical education group and medical practice solutions provider, reported on September 18, 2026 that Brazil’s Ministry of Education approved an increase of 17 medical seats at its AFYA Cruzeiro do Sul campus in Cruz...
Afya Confirms Early-Stage Talks With Yduqs on Potential Business Combination
Aug 24, 2026
On August 24, 2026, Afya Limited stated that talks with fellow Brazilian education company Yduqs Participações S.A. about a potential business combination are in a preliminary phase. The company emphasized that no binding agreements or c...
Afya Posts Solid First-Half 2026 Results and Returns R$448 Million to Shareholders
Aug 13, 2026
On August 13, 2026, Afya reported its second-quarter and first-half 2026 results, showing steady top-line growth but some margin pressure as it advanced its investment cycle. Second-quarter revenue rose 5.7% year on year to R$972.1 million and adj...
Afya Posts Higher First-Half 2026 Profit on Revenue Growth in Brazil
Aug 13, 2026
Afya Limited has filed unaudited interim condensed consolidated financial statements for the period ended June 30, 2026, showing stable assets of R$9.33 billion and total equity of R$4.93 billion, slightly higher than at year-end 2025. The filing,...
Afya Names Marcelo Ken Suhara Chair of Audit, Risks and Ethics Committee After Board Member’s Passing
Jul 30, 2026
Afya Limited, Brazil’s leading medical education group and provider of medical practice solutions, reported a governance change following the July 27, 2026 appointment of board member Marcelo Ken Suhara as chair of its Audit, Risks and Ethic...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.