Value
8.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.7 |
| P/S | 10.0 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 10.0 |
| PEG | 4.3 |
| Analyst target | 9.0 |
- ▸Forward P/E: 5.3x
- ▸PEG: 2.22
- ▸Attractively valued
AFYA · Why this verdict
Why Afya (AFYA) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score6.0/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Afya is a deeply undervalued, high-quality education company with a 9/9 Piotroski score and a 3-of-4 earnings beat streak, but a death cross and capitulation-level RSI of 19 mean the price trend has not yet stabilised.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Forward P/E of 5.2x and a 65% margin of safety make Afya extremely undervalued versus its earnings power. Valuation breakdown | The valuation gap narrows as price recovers toward the $13.97 analyst target. | →Stable |
| CounterVery low multiples can signal a value trap if earnings are expected to fall or emerging-market risk is being priced in. | ||
A perfect 9/9 Piotroski F-Score and strong 20% margins mark a high-quality business, though FCF is only 49% of net income. Quality breakdown | FCF conversion improves above 70% while margins stay near 20%. | →Stable |
| CounterThe earnings-quality red flag at 49% FCF/NI suggests reported profit may not fully convert to cash. | ||
Afya beat estimates in 3 of the last 4 quarters with an average 10.8% surprise, and reports in 11 days. Avg surprise pct | Next earnings on 2026-11-12 beat consensus again, supporting a re-rating. | ↑Improving |
| CounterThe May 2026 miss shows beats are not guaranteed, and a miss ahead of weak technicals could deepen the selloff. | ||
A death cross and price below the 200-day average, with RSI at 19, mean the downtrend is intact and the stock has not stabilised. Momentum breakdown | Price reclaims the 200-day average and momentum rises above 4.5 over the next 12 months. | →Stable |
| CounterOversold prices can keep falling; waiting for stabilisation is the stated prudent approach given the 6.5/10 knife-catching score. | ||
The $13.97 analyst target implies 33.7% upside against 15.0% downside, a reward-to-risk of 2.24 at $10.45. Estimated upside | Price closes at least half the gap to the target within 12 months. | →Stable |
| CounterCoverage is light with 8 analysts and targets are dampened; implied volatility is extreme, so the downside could exceed the 15% stop distance. | ||
Forward P/E of 5.2x and a 65% margin of safety make Afya extremely undervalued versus its earnings power.
→StableValuation breakdown
- Expectation
- The valuation gap narrows as price recovers toward the $13.97 analyst target.
CounterVery low multiples can signal a value trap if earnings are expected to fall or emerging-market risk is being priced in.
A perfect 9/9 Piotroski F-Score and strong 20% margins mark a high-quality business, though FCF is only 49% of net income.
→StableQuality breakdown
- Expectation
- FCF conversion improves above 70% while margins stay near 20%.
CounterThe earnings-quality red flag at 49% FCF/NI suggests reported profit may not fully convert to cash.
Afya beat estimates in 3 of the last 4 quarters with an average 10.8% surprise, and reports in 11 days.
↑ImprovingAvg surprise pct
- Expectation
- Next earnings on 2026-11-12 beat consensus again, supporting a re-rating.
CounterThe May 2026 miss shows beats are not guaranteed, and a miss ahead of weak technicals could deepen the selloff.
A death cross and price below the 200-day average, with RSI at 19, mean the downtrend is intact and the stock has not stabilised.
→StableMomentum breakdown
- Expectation
- Price reclaims the 200-day average and momentum rises above 4.5 over the next 12 months.
CounterOversold prices can keep falling; waiting for stabilisation is the stated prudent approach given the 6.5/10 knife-catching score.
The $13.97 analyst target implies 33.7% upside against 15.0% downside, a reward-to-risk of 2.24 at $10.45.
→StableEstimated upside
- Expectation
- Price closes at least half the gap to the target within 12 months.
CounterCoverage is light with 8 analysts and targets are dampened; implied volatility is extreme, so the downside could exceed the 15% stop distance.
Per-dimension breakdown
Quality
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.6 |
| ROA | 5.6 |
| Gross margin | 8.8 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 7.6 |
| FCF quality | 4.0 |
| Moat | 7.0 |
| Piotroski F | 10.0 |
- ▸Strong margins: 20%
- ▸Earnings quality RED FLAG: 49% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
- ▸High-quality business
Growth
4.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.9 |
| EPS growth | 5.5 |
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Capitulation risk (RSI 22, below 200MA)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.1%/30d — confirmed downtrend
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.0 |
| Analyst rating | 6.8 |
| Price target | 9.6 |
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 54%
Insider
3.7/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 3.2 |
| notable moves | 3.0 |
- ▸Insider selling (low materiality) — $55,341 (0.006% of mkt cap)
Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.2 |
| quality rank | 6.2 |
| growth rank | 4.2 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.3 |
| support resistance | 8.6 |
| 52w position | 2.9 |
| gap | 5.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.5 |
| days to cover | 10.0 |
| volatility | 0.0 |
| put call | 6.7 |
| beta | 10.0 |
| debt equity | 7.2 |
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 9.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 8.4 |
| dividend safety | 7.0 |
| news activity | 8.0 |
- ▸Estimates up 45.9% (30d)
- ▸Earnings in 9 days
- ▸Dividend aristocrat: 6.2% yield
How the verdict was assembled
Engine trigger
Deep value: 64% margin of safety. Extreme undervaluation. | Falling knife (FK=6.5): wait for stabilization.
Engine technical detail
verdict_path:
L4:PATH_A_DEEP_VALUE|L5:FALLING_KNIFE_FK=6.5|ENTRY_STICKY:WITHIN_BANDPassed (6)
- ASYMMETRY:2.2>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.8<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- EARNINGS_PROXIMITY:9d<=14d (soft)
Reward-to-Risk
2.24
Upside
+33.6%
Downside
15.0%
Sizing output
STARTER
SetupFalling Knife — Death cross, below all MAs, RSI 22, MACD bearish
EdgeTemporary headwind — High quality (7.6) with weak momentum (2.8)
SuitabilityAggressive — MCap $0.9B<$5B
Investment implication
The STRONG_BUY_WAIT verdict reflects the MOMENTUM gate's 2.8<4.5 outcome against Value at 8.6 and asymmetric R:R of 2.24.
The strongest dimensions are Value at 8.6, Quality at 7.6, and Catalyst at 7.2; the weakest are Momentum at 2.8, Insider at 3.7, and Growth at 4.7. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 2.24 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Forward Pe
Trip ifForward P/E exceeds 9x without a matching rise in earnings estimates.
- P2High Quality Financial Health
Trip ifPiotroski F-Score falls below 6 from the current 9.
- P3Earnings Beat Streak Catalyst
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P4Broken Price Trend Capitulation
Trip ifPrice falls below the $9.37 stop-loss level.
- P5Analyst Target Upside
Trip ifAnalyst target drops below $11.50, cutting implied upside under 10%.