Assessing Afya (NasdaqGS:AFYA)’s Valuation After a 3-Month Share Price Pullback

Afya (NasdaqGS:AFYA) has been drifting lower again, extending a weak past 3 months that leaves the stock down about 10%, even as revenue and net income keep growing at a solid clip. See our latest analysis for Afya. Over the past year, Afya’s total shareholder return of roughly negative 5% and a weaker 5 year total shareholder return of about negative 41% suggest momentum has been fading, as investors reassess growth prospects and Brazil specific risks despite ongoing earnings progress. If Afya’s recent pullback has you rethinking your exposure to Brazilian education, it could be worth scanning other healthcare stocks that may offer a different balance of growth and defensiveness. With earnings still climbing and the share price lagging, Afya now trades at a sizeable discount to analyst targets. The key question is whether this represents a mispriced opportunity in Brazilian healthcare education or a market that already anticipates slower growth. Most Popular Narrative: 21% Undervalued Afya’s most followed narrative sees fair value meaningfully above the last close of $14.56, framing the recent share weakness as a potential pricing mismatch. The company's focus on operational efficiencies (including centralized shared services and cost controls across all segments) is expected to continue driving SG&A expense dilution and margin expansion, enhancing future net income and free cash flow. M&A opportunities in Brazil's medical education market are becoming more attractive due to pressured sellers, and Afya remains well positioned and financially disciplined to execute value accretive acquisitions, further increasing market share, student base, and long term revenue potential. Read the complete narrative. Want to see what kind of revenue runway and margin lift justify this upside view, and how future earnings multiples tie it all together? The full narrative lays out a detailed glide path for growth, profitability, and valuation that the current share price is not reflecting. Result: Fair Value of $18.53 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, shifts in Brazil’s tax regime and intensifying competition for medical students could pressure margins and enrollment, challenging this apparent undervaluation. Find out about the key risks to this Afya narrative. Build Your Own Afya Narrative If you see the story differently or want to dig into the numbers yourself, you can craft a personalized thesis in just a few minutes: Do it your way A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Afya. Looking for more investment ideas? Before you move on, consider using the Simply Wall St Screener to uncover stocks that match your strategy with precision. Target income potential by scanning these 12 dividend stocks with yields > 3% that can help anchor your portfolio with reliable cash returns. Pursue future growth stories by analyzing these 24 AI penny stocks harnessing artificial intelligence to reshape entire industries. Explore valuation gaps by reviewing these 902 undervalued stocks based on cash flows that the market may be overlooking. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.Mobile Infrastructure for Defense and DisasterThe next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.Get the investor briefing before the next round of contractsSponsored On Behalf of CiTech