Afya Ltd. (AFYA) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Perdoceo Education Corp.

Mister Car Wash, Inc.

Agiliti, Inc. (Minnesota)

Afya Ltd.

Strategic Education, Inc.

OneSpaWorld Holdings Ltd.

Adtalem Global Education, Inc.

Peloton Interactive, Inc.

WW International, Inc.

Sonder Holdings, Inc.

European Wax Center, Inc.

Why is Afya Ltd. ?

High Management Efficiency with a high ROCE of 15.90%

Strong ability to service debt as the company has a low Debt to EBITDA ratio of 1.36 times

Healthy long term growth as Net Sales has grown by an annual rate of 23.17% and Operating profit at 24.90%

Positive results in Mar 26

OPERATING CASH FLOW(Y) Highest at USD 232.41 MM
ROCE(HY) Highest at 16.68%
DIVIDEND PAYOUT RATIO(Y) Highest at 0.12%

With ROCE of 20.33%, it has a very attractive valuation with a 1.47 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -17.85%, its profits have risen by 12.2% ; the PEG ratio of the company is 0.8

High Institutional Holdings at 40.06%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -17.85% returns in the last 1 year, the stock has also underperformed S&P 500 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Afya Ltd. should be less than 10%
Overall Portfolio exposure to Tour, Travel Related Services should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Tour, Travel Related Services)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Afya Ltd. for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

Afya Ltd.

-17.85%

-0.34

27.79%

S&P 500

22.24%

1.67

13.28%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

23.17%

EBIT Growth (5y)

24.90%

EBIT to Interest (avg)

2.51

Debt to EBITDA (avg)

0.88

Net Debt to Equity (avg)

0.25

Sales to Capital Employed (avg)

0.53

Tax Ratio

5.63%

Dividend Payout Ratio

0.02%

Pledged Shares

Institutional Holding

40.06%

ROCE (avg)

15.90%

ROE (avg)

11.91%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.56

EV to EBIT

7.22

EV to EBITDA

5.51

EV to Capital Employed

1.47

EV to Sales

2.36

PEG Ratio

0.82

Dividend Yield

ROCE (Latest)

20.32%

ROE (Latest)

15.46%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Bearish

RSI

Bullish

No Signal

Bollinger Bands

Bullish

Mildly Bearish

Moving Averages

Mildly Bearish (Daily)

KST

Mildly Bullish

Bearish

Dow Theory

Mildly Bullish

Mildly Bearish

OBV

No Trend

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

15What is working for the Company

OPERATING CASH FLOW(Y)

Highest at USD 232.41 MM

ROCE(HY)

Highest at 16.68%

DIVIDEND PAYOUT RATIO(Y)

Highest at 0.12%

RAW MATERIAL COST(Y)

Fallen by 1.29% (YoY

CASH AND EQV(HY)

Highest at USD 460.61 MM

DEBT-EQUITY RATIO (HY)

Lowest at 39.38 %

NET SALES(Q)

Highest at USD 192.67 MM

OPERATING PROFIT(Q)

Highest at USD 92.39 MM

PRE-TAX PROFIT(Q)

Highest at USD 56.93 MM

NET PROFIT(Q)

Highest at USD 48.9 MM

EPS(Q)

Highest at USD 0.54

-4What is not working for the Company

INTEREST(Q)

At USD 25.67 MM has Grown at 27.5%

INVENTORY TURNOVER RATIO(HY)

Lowest at 0 times

DEBTORS TURNOVER RATIO(HY)

Lowest at 5.05 times

Here's what is working for Afya Ltd.

Operating Cash Flow

Highest at USD 232.41 MM

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Net Sales

Highest at USD 192.67 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (USD MM)

Operating Profit

Highest at USD 92.39 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (USD MM)

Pre-Tax Profit

Highest at USD 56.93 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (USD MM)

Pre-Tax Profit

At USD 56.93 MM has Grown at 50.82%

over average net sales of the previous four periods of USD 37.75 MM

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (USD MM)

Net Profit

Highest at USD 48.9 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (USD MM)

Net Profit

At USD 48.9 MM has Grown at 45.92%

over average net sales of the previous four periods of USD 33.51 MM

MOJO Watch

Near term Net Profit trend is positive

Net Profit (USD MM)

EPS

Highest at USD 0.54

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (USD)

Cash and Eqv

Highest at USD 460.61 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debt-Equity Ratio

Lowest at 39.38 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Dividend Payout Ratio

Highest at 0.12%

in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Raw Material Cost

Fallen by 1.29% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Depreciation

Highest at USD 17.71 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (USD MM)

Here's what is not working for Afya Ltd.

Interest

At USD 25.67 MM has Grown at 27.5%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Inventory Turnover Ratio

Lowest at 0 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio

Debtors Turnover Ratio

Lowest at 5.05 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio