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1. Company Snapshot

1.a. Company Description

Afya Limited, through its subsidiaries, operates as a medical education group in Brazil.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.As of December 31, 2021, it operated a network of 46 undergraduate and graduate medical school campuses consisted of 30 undergrad operating units and five approved units; and a network of 2,731 medical school seats that consisted of 2,481 operating seats and 278 approved seats.


The company was founded in 1999 and is headquartered in Nova Lima, Brazil.

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1.b. Last Insights on AFYA

Afya Limited's recent performance has been impacted by concerns over long-term medical school risks, including market saturation and increased competition in Brazil's medical education sector. Despite solid Q1 results with 16% YoY revenue growth, driven by acquisitions and organic expansion, valuation appears fair but not compelling. However, the company's Q2 2025 earnings call and financial results, released on August 13, showed strong short-term earnings. Additionally, a new share repurchase program, approved by the Board of Directors, may repurchase up to 4,000,000 outstanding Class A common shares. Morgan Stanley upgraded Afya to Equal Weight from Underweight, citing strong short-term earnings and a narrower valuation gap relative to peers.

1.c. Company Highlights

2. Afya's Strong Q3 Earnings: Growth Momentum Continues

Afya Limited reported a robust financial performance for the nine-month period ending September 2025, with revenue growing over 13% year-over-year to BRL 2.784 billion. Adjusted EBITDA growth was almost 19% year-over-year, reaching BRL 1.292 billion, resulting in an adjusted EBITDA margin of 46.4%, an increase of 200 basis points over the same period last year. The company's earnings per share (EPS) came in at BRL 0.38, beating analyst estimates of BRL 0.32. The strong performance was driven by the growth in the number of medical students, which increased by 6% year-over-year to over 25,000 students.

Publication Date: Nov -29

📋 Highlights
  • Revenue and EBITDA Growth:: Nine-month revenue rose 13% YoY to BRL 2.784 billion, with adjusted EBITDA up 19% to BRL 1.292 billion.
  • EBITDA Margin Expansion:: Adjusted EBITDA margin increased 200 bps to 46.4%, reflecting operational efficiency gains.
  • Continuing Education Growth:: Revenue grew 11% YoY to BRL 208 million, driven by 65% B2B revenue growth and 7% B2P increase.
  • Medical Practice Solutions:: Revenue rose 9% YoY to BRL 128 million, supported by expanded active payers and favorable product mix.
  • Net Debt Reduction:: Net debt declined BRL 473 million to BRL 1.342 billion, despite acquisitions and shareholder returns, aided by liability management.

Segment Performance

The company's medical schools' net average ticket, excluding acquisitions, increased by 3.4% for the nine months, reaching BRL 9,141. The continued education segment reported revenue growth of 11% year-over-year, reaching BRL 208 million, driven by a 7% increase in B2P revenue and a 65% increase in B2B revenue. Medical practice solutions revenue grew over 9% year-over-year, reaching BRL 128 million, primarily driven by an expansion in active payers in clinical management and a more favorable product mix.

Financial Position and Capital Allocation

Afya's financial position remains solid, with a net debt reduction of BRL 473 million compared to the end of 2024, despite the acquisition of FUNIC and returns to shareholders. The company's capital structure is conservative, with a leverage position of 1.23x Net Debt/EBITDA and a low cost of debt at 106% of the CDI. Afya is analyzing M&A opportunities, aiming to have around 200 seats per year as its guidance in terms of capital allocation, and will combine buyback programs and paying dividends.

Valuation and Outlook

Afya's current valuation metrics indicate a P/E Ratio of 10.05, P/B Ratio of 1.54, and EV/EBITDA of 5.77. Analysts estimate next year's revenue growth at 8.0%, indicating a continued growth momentum. With a strong financial performance and a solid capital structure, Afya is well-positioned to continue its growth trajectory. As Virgilio Gibbon stated, "Our results highlight the strength of our ecosystem while advancing initiatives that will shape the future of medical education and medical practice." The company's guidance for 2026 tuition, which is expected to be 5-10% higher than the current one, also supports the growth outlook.

3. NewsRoom

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Afya Limited (AFYA) Q3 2025 Earnings Call Transcript

Nov -13

Source: seekingalpha.com

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Afya (AFYA) Q3 Earnings Beat Estimates

Nov -13

Source: zacks.com

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Afya Limited Announces Medical Seats Increase in AFYA Faculdade de Ciências Médicas Bragança

Nov -07

Source: businesswire.com

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Afya Limited (AFYA) Analyst/Investor Day Transcript

Oct -24

Source: seekingalpha.com

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Afya's Multiple Is Back To Reasonable Levels, But Market Saturation Is Real

Aug -16

Source: seekingalpha.com

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Afya Limited (AFYA) Q2 2025 Earnings Call Transcript

Aug -14

Source: seekingalpha.com

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Afya Limited Announces Second-Quarter and First-Half 2025 Financial Results

Aug -13

Source: businesswire.com

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Afya Limited Announces a New Share Repurchase Program

Aug -13

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.10%)

6. Segments

Undergrad

Expected Growth: 8%

Afya Limited's 8% growth is driven by increasing demand for healthcare services, government initiatives to improve healthcare infrastructure, and strategic partnerships with healthcare providers. Additionally, the company's focus on digital health and telemedicine has expanded its reach, attracting a younger demographic. Furthermore, Afya's strong brand reputation and quality of education have led to increased student enrollment, contributing to its growth.

Digital Services

Expected Growth: 10%

Afya Limited's Digital Services segment growth is driven by increasing demand for online medical education, strategic partnerships with healthcare institutions, and expansion into new markets. Additionally, the company's investment in AI-powered learning platforms, mobile optimization, and user experience enhancements are contributing to its 10% growth.

Continuing Education

Expected Growth: 7%

Afya Limited's Continuing Education segment growth is driven by increasing demand for specialized healthcare professionals, government initiatives promoting healthcare workforce development, and the company's strategic partnerships with top medical institutions, expanding its online platform and course offerings, and leveraging technology to enhance the learning experience.

7. Detailed Products

Afya Learning

A digital learning platform that provides access to a comprehensive library of medical courses, tutorials, and assessments for healthcare professionals.

Afya Marketplace

An e-commerce platform that connects healthcare professionals with medical suppliers, enabling them to purchase medical equipment and supplies online.

Afya Data

A data analytics platform that provides insights and trends on healthcare data, enabling healthcare professionals to make informed decisions.

Afya Community

A social networking platform that connects healthcare professionals, enabling them to share knowledge, collaborate, and network.

8. Afya Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Afya Limited is medium because while there are alternative healthcare providers, Afya's unique approach to healthcare technology and its strong brand recognition mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers for Afya Limited is low because individual customers have limited negotiating power, and Afya's services are often reimbursed by insurance companies.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Afya Limited is medium because while suppliers of medical equipment and services have some negotiating power, Afya's scale and reputation mitigate this threat.

Threat Of New Entrants

The threat of new entrants for Afya Limited is high because the healthcare technology industry is rapidly evolving, and new entrants with innovative solutions could potentially disrupt Afya's market share.

Intensity Of Rivalry

The intensity of rivalry for Afya Limited is high because the healthcare technology industry is highly competitive, and Afya faces intense competition from established players and new entrants.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.62%
Debt Cost 8.85%
Equity Weight 57.38%
Equity Cost 8.85%
WACC 8.85%
Leverage 74.28%

11. Quality Control: Afya Limited passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.71$

Current Price

14.71$

Potential

-0.00%

Expected Cash-Flows