Afya Limited (AFYA): A Bull Case Theory

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

Afya Limited operates as a medical education group in Brazil. Afya represents a compelling yet overlooked education operator whose market dynamics, regulatory environment, and strategic execution create an interesting setup for investors willing to look past recent volatility. The broader reminder is to ignore short-term market noise—often random and misleading—and focus instead on price versus value. Afya, founded in 1999 as a single family-run medical school, has since scaled through disciplined acquisitions and organic expansion, culminating in its 2019 Nasdaq IPO and subsequent capital raise.

Major shareholders, including Bertelsmann—which purchased shares at $26.90 in 2022—remain underwater, suggesting potential value dislocation. The company today operates across undergraduate medical programs, continuing education, and medical practice solutions, though the undergraduate segment overwhelmingly drives economics. Its schools benefit from Brazil’s heavily regulated seat-authorization system, which protects incumbents from oversupply while supporting Afya’s position as the country’s leading medical education provider.

Revenue and profitability have grown sharply despite aggressive M&A, currency depreciation, and stable share count, supported by strong cash generation and modest leverage. Long-term demand fundamentals remain favorable, with Brazil expected to nearly double its physician base over the next decade and international opportunities offering further structural support. Management, led since 2016 by CEO Virgilio Gibbon, has demonstrated consistent execution through IPO, acquisitions, and operational scaling.

Risks remain—including upcoming refinancing at higher Brazilian interest rates, material tax increases, and potential regulatory loosening that could weaken pricing power. Still, profit growth persists, and strong demand for medical education provides a durable tailwind. Afya’s mix of regulated scarcity, proven management, and cash-generative operations positions it as an intriguing candidate for deeper investor investigation.

Previously we covered a bullish thesis on Coursera, Inc. (COUR) by Unemployed Value Degen in November 2024, which highlighted its high-margin platform, strong user growth, and AI-focused offerings. The company’s stock price has been flat since our coverage. The thesis still stands as Coursera’s scale and cash generation support long-term growth. Emerging Value shares a similar view on Afya Limited but emphasizes its regulated Brazilian medical education market and disciplined M&A growth.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.