Is Afya Limited Stock a Buy (Stock Analysis)

Afya Limited (Ticker: AFYA) operates as a medical education group in Brazil. They offer medical schools, graduate courses, and more educational programs. They also have branched out into digital services. They launched a subscription-based mobile app and website portal that helps medical professionals. This is just a few of the medical products and services that this company owns. They currently trade at a market cap of around $1.46 billion. 

At time of writing, Afya currently trades at $15.60 a share. They currently trade at a p/e ratio (share price divided by earnings per share) of around 16.96. Afya is a fast-growing company historically. Last year, the company did $2.33 billion in revenue and $373.57 million in earnings. The year before that they did $1.72 billion in revenue and $223.33 million in earnings. A company growing as quickly as Afya is with a p/e ratio of 16.96 is, in my opinion, very reasonable.

Looking at the company's current balance sheet, one will find that the company currently has $722.69 million. They $8.04 in cash for every share that they have. The company is in debt. They have $2.85 billion in total debt giving them a current ratio of 1.08. A current ratio measures current assets/current liabilities, and it can be a good way to see how easily a company can pay off its debts. A good current ratio would be 1.5-3, but I am not too worried about this company because I believe that that will get better in time. 

Overall, I think this is a strong company. Yahoo Finance currently has the stock as undervalued, and I believe that it is undervalued as well. Many analysts have this stock listed as a buy. Stock research company Zacks even has them as a strong buy. In my opinion, the stock has a lot of indicators that this is a good company to hold for the long-term. 

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