Why Afya Stock Edged Higher Today

Brazil-based medical education company Afya (AFYA 2.39%) edged past many stocks in the market on Tuesday. The share price improved by 2.4%, which was sufficient to top the 1.9% increase of the bellwether S&P 500 index. Investors were encouraged by the company’s recent performance as indicated by its third-quarter results.

Afya posted a mixed third quarter

Afya published those figures after market hours on Monday, and they showed that the company’s adjusted net revenue rose by almost 25% year over year to 723 million reals ($147 million). Headline net income also saw a double-digit improvement, as it came in 22% higher at 98.2 million reals ($20 million). On a per-share basis, that shook out to 1.03 reals ($0.21).

That meant a mixed quarter for Afya, as analysts tracking the South American stock were estimating it would earn less than 718 million reals ($146 million). However, they were also modeling a higher per-share net income figure of 1.29 reals ($0.26).

Still, those growth numbers were encouraging, and provided plenty of optimism on a broadly lucrative day for stock investors. One positive development for Afya was that all three of its segments — continuing education, digital health services, and undergraduate — posted solid growth for the quarter. Of the trio, continuing education was the leader with 35% growth, while the largest (undergrad) rose by 25%.

Existing guidance reaffirmed

Afya also reaffirmed its previously published guidance. It’s forecasting that it will post net revenue of 2.75 billion reals ($559 million) to 2.85 billion reals ($579 million). Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) should land at 1.1 billion reals ($224 million) to 1.2 billion reals ($244 million). The company did not provide any net income estimates.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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