Fact based stock research
Afya (NasdaqGS:AFYA)

KYG011251066

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Afya stock research in summary

afya.com.br

ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Afya (Education Services, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of Afya are a good value (attractively priced) with a consolidated Value Rank of 53 (better than 53% of alternatives), show above-average growth (Growth Rank of 65) but are riskily financed (Safety Rank of 43), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Afya's financial characteristics. As the company Afya's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 53) and above-average growth (Obermatt Growth Rank of 65), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 43) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	53
Growth Rank	65
Safety Rank	43
Combined Rank	67

Country	Brazil
Industry	Education Services
Index	NASDAQ
Size class	Medium

18-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Afya

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	28	67	53	53
GROWTH
GROWTH	83	27	39	65
SAFETY
SAFETY	86	93	35	43
SENTIMENT
SENTIMENT	n/a	74	57	^new
360° VIEW
360° VIEW	n/a	89	45	^new

Most recent update of the stock research: 18-Apr-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Afya is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	28	67	53	53
GROWTH
GROWTH	83	27	39	65
SAFETY
SAFETY	86	93	35	43
COMBINED
COMBINED	77	93	41	67

Last update of combined financial performance: 18-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Afya the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 53 (better than 53% compared with alternatives), Afya shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Afya. Price-to-Profit (also referred to as price-earnings, P/E) is 73 which means that the stock price compared with what market professionals expect for future profits is lower than for 73% of comparable companies, indicating a good value concerning Afya's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 71, which means that the stock price is lower as regards to invested capital than for 71% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 55% of alternatives (only 45% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 53, is a buy recommendation based on Afya's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	24	47	34	45
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	72	89	78	73
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	57	78	61	71
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	28	67	53	53

Last update of Value Rank: 18-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Afya; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Afya shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Afya. Capital Growth has a rank of 95, which means that currently professionals expect the company to grow its invested capital more than 46% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 77 (above 77% of alternative investments). But Sales Growth has only a rank of 31, which means that, currently, professionals expect the company to grow less than 69% of its competitors, and Profit Growth is also low at a rank of 46. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Afya, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	96	74	29	31
PROFIT GROWTH
PROFIT GROWTH	n/a	10	28	46
CAPITAL GROWTH
CAPITAL GROWTH	n/a	90	69	95
STOCK RETURNS
STOCK RETURNS	12	17	77	77
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	83	27	39	65

Last update of Growth Rank: 18-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Afya.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 43 (better than 43% compared with alternatives), the company Afya has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Afya is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Afya. Liquidity is at 49, meaning that the company generates less profit to service its debt than 51% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Finally, Refinancing is at a rank of 37 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 63% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 43 (worse than 57% compared with alternatives), Afya has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Afya because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	71	62	32	36
REFINANCING
REFINANCING	59	69	41	37
LIQUIDITY
LIQUIDITY	87	64	35	49
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	86	93	35	43

Last update of Safety Rank: 18-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Afya and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	39	76	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	72	17	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	30	30	^new
MARKET PULSE
MARKET PULSE	n/a	94	81	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	74	57	^new

Last update of Sentiment Rank: 18-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Afya.
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