Value
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.1 |
| P/S | 10.0 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 9.6 |
| PEG | 4.1 |
| Analyst target | 4.0 |
- ▸Forward P/E: 7.8x
- ▸PEG: 2.44
- ▸Attractively valued
AFYA · Why this verdict
Why Afya (AFYA) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Price momentum sits below the minimum entry gate — the stock is below its 200-day moving average with falling OBV and a high-volume selloff indicating distribution pressure — all of which argue for patience before committing capital. Momentum breakdown | Momentum concerns resolve if the stock recrosses above its 200-day moving average on volume exceeding 2.1x the average for at least 2 consecutive sessions. | →Stable |
| CounterThe long-term moving average is still rising — the current weakness is a pullback within an ongoing uptrend, not a confirmed reversal — and the momentum weakness may be temporary rather than structural. | ||
The business earns a perfect Piotroski F-Score of 9 out of 9 with 20% operating margins, and the overall quality profile is characterized as high-quality, placing it among the strongest in its peer group on financial health metrics. Quality breakdown | Operating margins should remain above 18% and the Piotroski score should stay at 8 or above across the next four reporting periods. | →Stable |
| CounterFree cash flow is 69% of reported net income — below the level needed to match earnings on a cash basis — and a sustained or widening gap between reported earnings and cash generation could undermine the quality narrative. | ||
At a forward P/E of 6.9x against analyst consensus implying 21% upside, the stock screens as one of the more attractively valued names in its peer group on both absolute and relative metrics. Valuation breakdown | If the valuation discount narrows over 12 months, the price should move toward the analyst target, compressing the forward multiple toward 9–10x as earnings hold firm. | →Stable |
| CounterThe upside to the near-term price target is only 5.2%, meaning the stock is already pricing in a large portion of the consensus view — thin headroom from here constrains the near-term gain even if the headline multiple looks cheap. | ||
A miss in the most recent quarter was preceded by three consecutive beats, and the average earnings surprise across all four periods is 11.9%, indicating a track record of above-estimate delivery despite the most recent stumble. Earnings | Beat consistency is confirmed if the next two quarters both deliver EPS surprises above 5%, reinstating the prior pattern. | →Stable |
| CounterThe most recent quarter missed at -2.1% — if guidance has become harder to forecast or underlying growth is softening, the prior beat streak may prove harder to reestablish than the trailing average implies. | ||
Revenue growth is soft, placing the company toward the lower end of growth among its peers, which limits the multiple-expansion argument and makes the valuation discount harder to close through growth alone. Bear case | This concern fades if average quarterly EPS surprise rises above 15% for 4 consecutive quarters, demonstrating that earnings are accelerating even if top-line growth remains measured. | →Stable |
| CounterWeak growth at a 6.9x forward P/E still leaves substantial room for re-rating if earnings delivery holds — a premium multiple is not required for the thesis to work when the starting valuation is this low. | ||
Price momentum sits below the minimum entry gate — the stock is below its 200-day moving average with falling OBV and a high-volume selloff indicating distribution pressure — all of which argue for patience before committing capital.
→StableMomentum breakdown
- Expectation
- Momentum concerns resolve if the stock recrosses above its 200-day moving average on volume exceeding 2.1x the average for at least 2 consecutive sessions.
CounterThe long-term moving average is still rising — the current weakness is a pullback within an ongoing uptrend, not a confirmed reversal — and the momentum weakness may be temporary rather than structural.
The business earns a perfect Piotroski F-Score of 9 out of 9 with 20% operating margins, and the overall quality profile is characterized as high-quality, placing it among the strongest in its peer group on financial health metrics.
→StableQuality breakdown
- Expectation
- Operating margins should remain above 18% and the Piotroski score should stay at 8 or above across the next four reporting periods.
CounterFree cash flow is 69% of reported net income — below the level needed to match earnings on a cash basis — and a sustained or widening gap between reported earnings and cash generation could undermine the quality narrative.
At a forward P/E of 6.9x against analyst consensus implying 21% upside, the stock screens as one of the more attractively valued names in its peer group on both absolute and relative metrics.
→StableValuation breakdown
- Expectation
- If the valuation discount narrows over 12 months, the price should move toward the analyst target, compressing the forward multiple toward 9–10x as earnings hold firm.
CounterThe upside to the near-term price target is only 5.2%, meaning the stock is already pricing in a large portion of the consensus view — thin headroom from here constrains the near-term gain even if the headline multiple looks cheap.
A miss in the most recent quarter was preceded by three consecutive beats, and the average earnings surprise across all four periods is 11.9%, indicating a track record of above-estimate delivery despite the most recent stumble.
→StableEarnings
- Expectation
- Beat consistency is confirmed if the next two quarters both deliver EPS surprises above 5%, reinstating the prior pattern.
CounterThe most recent quarter missed at -2.1% — if guidance has become harder to forecast or underlying growth is softening, the prior beat streak may prove harder to reestablish than the trailing average implies.
Revenue growth is soft, placing the company toward the lower end of growth among its peers, which limits the multiple-expansion argument and makes the valuation discount harder to close through growth alone.
→StableBear case
- Expectation
- This concern fades if average quarterly EPS surprise rises above 15% for 4 consecutive quarters, demonstrating that earnings are accelerating even if top-line growth remains measured.
CounterWeak growth at a 6.9x forward P/E still leaves substantial room for re-rating if earnings delivery holds — a premium multiple is not required for the thesis to work when the starting valuation is this low.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Afya trades at a notably low forward P/E of 6.9x with a near-perfect Piotroski score and three beats in the last four quarters, but soft revenue growth and a momentum profile that has yet to recover above the long-term average require patience at entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.6 |
| ROA | 5.5 |
| Gross margin | 8.9 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 6.4 |
| FCF quality | 5.3 |
| Moat | 7.0 |
| Piotroski F | 10.0 |
- ▸Strong margins: 20%
- ▸Earnings quality warning: 69% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
- ▸High-quality business
Growth
3.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.5 |
| EPS growth | 2.6 |
Momentum
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.5 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 4.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.1 |
| erm sentiment | 5.0 |
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $1,144,609 (0.082% of mkt cap)
Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.6 |
| quality rank | 7.8 |
| growth rank | 6.1 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.5 |
| 52w position | 7.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 6.3 |
| volatility | 5.5 |
| put call | 6.7 |
| implied vol | 3.3 |
| beta | 10.0 |
| debt equity | 7.0 |
- ▸High IV: 60%
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 8.5 |
| dividend safety | 5.5 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 429.0%
How the verdict was assembled
Engine trigger
Downgraded from BUY WAIT — price $15.27 has reached target $15.06. No upside to wait for.
Engine technical detail
verdict_path:
L4:PATH_A_VALUE_MOS33|V8:TARGET_REACHED|SANITY:WAIT+price>=TPPassed (7)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.5=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.53
Upside
-6.4%
Downside
11.9%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeInst Constrain — Small cap ($1.4B) below institutional reach
SuitabilityAggressive — MCap $1.4B<$5B
Investment implication
The HOLD_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.5=NEGATIVE outcome against Quality at 7.6 and asymmetric R:R of -0.53.
The strongest dimensions are Quality at 7.6, Value at 7.4, and Momentum at 7.2; the weakest are Technical at 2.5, Growth at 3.5, and Insider at 3.8. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.53 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deeply Discounted Valuation
Trip ifForward P/E expands above 12x without a corresponding earnings estimate upgrade, signaling the valuation discount has closed.
- P2High Quality Franchise Margins
Trip ifOperating margins compress below 15% for 2 consecutive quarters.
- P3Earnings Beat Consistency
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, extending the miss streak beyond 2 periods.
- P4Weak Growth Headwind
Trip ifAverage quarterly EPS surprise rises above 15% for 4 consecutive quarters, demonstrating that earnings are accelerating and removing the weak-growth bear case.
- P5Momentum Below Entry Threshold
Trip ifStock recrosses above the 200-day moving average on volume exceeding 2.1x average for 2 consecutive sessions, confirming momentum recovery.