Afya Limited Class A Common Shares (AFYA)

FairStock Score: 79/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I look for businesses with durable competitive advantages, solid financials, and a margin of safety. Afya operates medical and health education schools in Brazil, a sector with high barriers to entry due to regulation and accreditation. In the second quarter of fiscal 2026, revenue was $972.1 million and net income was $197.1 million, a 20.28% net margin, indicating profitability. However, the company's return on capital employed is only 8.41%, suggesting the moat is not wide. The balance sheet shows a debt-to-equity of 0.63, and the Altman Z-Score of 0.95 is in the distress zone, a red flag. The Piotroski F-Score of 5/9 is mediocre. On valuation, the stock trades at a P/E of 8.64 and P/B of 1.34. The Graham Number is $45.70, offering a 68.23% margin of safety at the recent price of $14.52. The PEG ratio of 0.60 and EV/EBITDA of 1.99 suggest deep undervaluation, and the FCF yield of 94.0% is extraordinary. A 4.83% dividend yield and low beta of 0.38 add appeal. But the Lynch category is none due to insufficient filed results, indicating a limited public track record. Growth has been positive, but I need to see sustainable profit growth. The company could be a classic cigar butt, but the financial risk is real. I would require a larger discount or clearer catalyst before considering.

In plain English: Afya runs medical and health education schools in Brazil. The business is profitable and has been growing, but it carries some debt and its financial safety score is not strong. Based on its profits and book value, the stock price looks cheap.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer