Afya Limited (AFYA): A Bull Case Theory

We came crossed a bullish thesis on Afya Limited on Emerging Value’s Substack. In this article, we volition summarize the bulls’ thesis on AFYA. Afya Limited's share was trading astatine $14.99 as of November 26th. AFYA’s trailing and forward P/E were 10.11 and 7.67 respectively according to Yahoo Finance.

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Afya Limited operates as a aesculapian acquisition radical successful Brazil. Afya represents a compelling yet overlooked acquisition relation whose marketplace dynamics, regulatory environment, and strategical execution make an absorbing setup for investors consenting to look past caller volatility. The broader reminder is to disregard short-term marketplace noise—often random and misleading—and absorption alternatively connected terms versus value. Afya, founded successful 1999 arsenic a azygous family-run aesculapian school, has since scaled done disciplined acquisitions and integrated expansion, culminating successful its 2019 Nasdaq IPO and subsequent capital raise.

Major shareholders, including Bertelsmann—which purchased shares astatine $26.90 successful 2022—remain underwater, suggesting imaginable worth dislocation. The institution today operates across undergraduate aesculapian programs, continuing education, and aesculapian signifier solutions, though the undergraduate conception overwhelmingly drives economics. Its schools benefit from Brazil’s heavy regulated seat-authorization system, which protects incumbents from oversupply portion supporting Afya’s presumption arsenic the country’s starring aesculapian acquisition provider.

Revenue and profitability person grown sharply contempt assertive M&A, currency depreciation, and unchangeable stock count, supported by beardown currency procreation and humble leverage. Long-term request fundamentals remain favorable, with Brazil expected to astir treble its doc basal implicit the adjacent decennary and planetary opportunities offering further structural support. Management, led since 2016 by CEO Virgilio Gibbon, has demonstrated consistent execution done IPO, acquisitions, and operational scaling.

Risks remain—including upcoming refinancing astatine higher Brazilian involvement rates, worldly taxation increases, and imaginable regulatory loosening that could weaken pricing power. Still, nett maturation persists, and beardown request for aesculapian acquisition provides a durable tailwind. Afya’s premix of regulated scarcity, proven management, and cash-generative operations positions it arsenic an intriguing campaigner for deeper capitalist investigation.