Afya (AFYA) versus The Competition Critical Review

Afya (NASDAQ:AFYA) is one of 166 public companies in the “Diversified Consumer Services” industry, but how does it contrast to its competitors? We will compare Afya to related companies based on the strength of its analyst recommendations, profitability, valuation, risk, dividends, institutional ownership and earnings.

Profitability

This table compares Afya and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Afya	20.55%	17.58%	9.09%
Afya Competitors	-3.43%	-28.34%	2.46%

Dividends

Afya pays an annual dividend of $0.66 per share and has a dividend yield of 6.2%. Afya pays out 40.2% of its earnings in the form of a dividend. As a group, “Diversified Consumer Services” companies pay a dividend yield of 5.8% and pay out 36.3% of their earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings for Afya and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Afya	1	3	4	0	2.38
Afya Competitors	1436	3435	5284	197	2.41

Afya currently has a consensus price target of $15.70, indicating a potential upside of 47.76%. As a group, “Diversified Consumer Services” companies have a potential upside of 57.90%. Given Afya’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Afya has less favorable growth aspects than its competitors.

Valuation and Earnings

This table compares Afya and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Afya	$662.01 million	$134.77 million	6.48
Afya Competitors	$3.24 billion	$219.82 million	11.72

Afya’s competitors have higher revenue and earnings than Afya. Afya is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

Afya has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500. Comparatively, Afya’s competitors have a beta of 0.50, indicating that their average share price is 50% less volatile than the S&P 500.

Institutional and Insider Ownership

88.0% of Afya shares are owned by institutional investors. Comparatively, 48.4% of shares of all “Diversified Consumer Services” companies are owned by institutional investors. 19.8% of shares of all “Diversified Consumer Services” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Afya competitors beat Afya on 10 of the 15 factors compared.

Afya Company Profile

Afya Limited, through its subsidiaries, operates as a medical education group in Brazil. The company operates through three segments: Undergrad, Continuing Education, and Digital Services. It offers educational products and services, including medical schools, medical residency preparatory courses, graduate courses, and other programs to lifelong medical learners enrolled across its distribution network, as well as to third-party medical schools. The company also provides digital health services, such as subscription-based mobile app and website portal that focuses on assisting health professionals and students with clinical decision-making through tools, such as medical calculators, charts, and updated content, as well as prescriptions, clinical scores, medical procedures and laboratory exams, and others. It offers health sciences courses, which comprise medicine, dentistry, nursing, radiology, psychology, pharmacy, physical education, physiotherapy, nutrition, and biomedicine; and degree programs and courses in other subjects and disciplines, including undergraduate and post graduate courses in business administration, accounting, law, civil engineering, industrial engineering, and pedagogy. In addition, the company provides medical postgraduate specialization programs; printed and digital content; and an online medical education platform and practical medical training services. The company was founded in 1999 and is headquartered in Nova Lima, Brazil.