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Are Investors Undervaluing Afya (AFYA) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Afya (AFYA - Free Report) is a stock many investors are watching right now. AFYA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 12.04, while its industry has an average P/E of 22.18. Over the past year, AFYA's Forward P/E has been as high as 17.94 and as low as 3.04, with a median of 11.91.

Investors should also recognize that AFYA has a P/B ratio of 2.16. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.36. Over the past 12 months, AFYA's P/B has been as high as 2.63 and as low as 1.32, with a median of 2.13.

Another great Schools stock you could consider is Perdoceo Education (PRDO - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.

Perdoceo Education is trading at a forward earnings multiple of 8.93 at the moment, with a PEG ratio of 0.60. This compares to its industry's average P/E of 22.18 and average PEG ratio of 1.25.

Over the past year, PRDO's P/E has been as high as 10.53, as low as 6, with a median of 8.22; its PEG ratio has been as high as 0.70, as low as 0.40, with a median of 0.35 during the same time period.

Perdoceo Education also has a P/B ratio of 1.35 compared to its industry's price-to-book ratio of 2.36. Over the past year, its P/B ratio has been as high as 1.40, as low as 0.97, with a median of 1.17.

These are only a few of the key metrics included in Afya and Perdoceo Education strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, AFYA and PRDO look like an impressive value stock at the moment.


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