Afya (NASDAQ:AFYA) Reaches New 1-Year Low – Should You Sell?

Shares of Afya Limited (NASDAQ:AFYA) hit a new 52-week low during trading on Saturday. The company traded as low as $12.75 and last traded at $13.00, with a volume of 591542 shares traded. The stock had previously closed at $13.73.

Afya News Roundup

Here are the key news stories impacting Afya this week:

• Positive Sentiment: Merger creates significant scale. Afya and Yduqs signed a binding agreement to combine their operations, creating a group with approximately 1.6 million students and R$9.4 billion in revenue. Afya shareholders are expected to own about 69.3% of the combined company. Afya Limited and Yduqs Enter Into Merger Agreement
• Positive Sentiment: Potential for stronger cash generation and synergies. Management commentary highlighted faster cash-flow generation and additional consolidation opportunities. Analysts cited potential synergies of as much as R$2.8 billion, while the transaction is also reported to include approximately R$750 million in dividends. JP Morgan merger scenarios
• Positive Sentiment: Analyst valuation remains above the market price. AFYA has a consensus price target of $17.75, implying substantial potential upside from recent trading levels. Afya consensus target price
• Neutral Sentiment: Listing and transaction structure remain important questions. Reports suggest the merger could affect AFYA’s Nasdaq listing, while the share-exchange structure, approvals and integration plans still need to be completed. These uncertainties may be limiting the immediate benefit of the announcement. Afya and Yduqs listing report
• Negative Sentiment: Short interest increased sharply. One report showed short interest rising 163.2% to 1.41 million shares as of September 15, equal to roughly 5.2 days of average volume. A separate report listed zero short interest, indicating inconsistent data; the increase should therefore be treated cautiously. Zacks Strong Sell list
• Negative Sentiment: Near-term sentiment is cautious. Zacks added AFYA to its No. 5, or “Strong Sell,” ranking, adding pressure while investors assess merger execution and the company’s future trading venue.

Wall Street Analyst Weigh In

A number of research analysts have issued reports on the stock. Weiss Ratings downgraded shares of Afya from a “hold (c)” rating to a “hold (c-)” rating in a research report on Friday, July 31st. Bank of America reissued a “neutral” rating on shares of Afya in a research note on Thursday, June 11th. Zacks Research lowered shares of Afya from a “hold” rating to a “strong sell” rating in a report on Friday, August 21st. Wall Street Zen raised shares of Afya from a “hold” rating to a “buy” rating in a research note on Saturday, September 5th. Finally, JPMorgan Chase & Co. lowered their target price on shares of Afya from $21.50 to $21.00 and set a “neutral” rating for the company in a report on Monday, June 22nd. One research analyst has rated the stock with a Buy rating, five have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock presently has a consensus rating of “Hold” and a consensus price target of $17.75.

Afya Stock Performance

The company has a debt-to-equity ratio of 0.39, a quick ratio of 2.20 and a current ratio of 2.20. The stock’s 50-day moving average is $14.00 and its 200 day moving average is $14.34. The firm has a market cap of $1.22 billion, a P/E ratio of 7.93 and a beta of 0.35.

Afya (NASDAQ:AFYA) last posted its earnings results on Friday, August 14th. The company reported $0.43 earnings per share for the quarter, topping the consensus estimate of $0.40 by $0.03. Afya had a return on equity of 17.58% and a net margin of 20.55%.The firm had revenue of $187.80 million for the quarter, compared to analyst estimates of $189.62 million. On average, research analysts predict that Afya Limited will post 1.86 earnings per share for the current year.

Insider Transactions at Afya

In related news, VP Lélio de Souza, Jr. sold 36,204 shares of the stock in a transaction that occurred on Wednesday, July 1st. The stock was sold at an average price of $15.00, for a total transaction of $543,060.00. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website.

Institutional Inflows and Outflows

A number of hedge funds have recently bought and sold shares of AFYA. Public Employees Retirement System of Ohio bought a new stake in Afya in the 2nd quarter valued at $67,000. Engineers Gate Manager LP bought a new position in Afya during the second quarter worth $325,000. Finally, Banco BTG Pactual S.A. bought a new position in Afya during the fourth quarter worth $462,000. 88.02% of the stock is currently owned by institutional investors.

About Afya

Afya Limited is a Brazilian medical education and technology company that operates an integrated platform for physicians and medical students. The company provides education and professional development throughout the medical career cycle, from undergraduate training and residency preparation to continuing medical education and specialization programs.

Afya’s offerings include medical schools, preparatory courses, postgraduate and continuing education programs, digital learning tools, and clinical practice technologies.