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Is Afya (AFYA) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Afya (AFYA - Free Report) . AFYA is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 8.67. This compares to its industry's average Forward P/E of 12.83. AFYA's Forward P/E has been as high as 12.39 and as low as 7.58, with a median of 9.02, all within the past year.

Investors should also note that AFYA holds a PEG ratio of 0.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AFYA's PEG compares to its industry's average PEG of 0.79. AFYA's PEG has been as high as 0.60 and as low as 0.25, with a median of 0.35, all within the past year.

Another valuation metric that we should highlight is AFYA's P/B ratio of 1.81. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. AFYA's current P/B looks attractive when compared to its industry's average P/B of 3.96. Over the past 12 months, AFYA's P/B has been as high as 2.42 and as low as 1.57, with a median of 2.03.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Afya is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AFYA feels like a great value stock at the moment.

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