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Is Afya (AFYA) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 value investors might notice is Afya (AFYA). AFYA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for AFYA is its P/B ratio of 1.61. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.85. Over the past 12 months, AFYA's P/B has been as high as 4.78 and as low as 1.54, with a median of 2.36.

Finally, investors will want to recognize that AFYA has a P/CF ratio of 11.85. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 33.34. Within the past 12 months, AFYA's P/CF has been as high as 36.15 and as low as 11.34, with a median of 19.37.

Lincoln Educational Services (LINC) may be another strong Schools stock to add to your shortlist. LINC is a # 2 (Buy) stock with a Value grade of A.

Lincoln Educational Services is trading at a forward earnings multiple of 9.70 at the moment, with a PEG ratio of 0.65. This compares to its industry's average P/E of 41.04 and average PEG ratio of 2.60.

LINC's Forward P/E has been as high as 13.75 and as low as 7.58, with a median of 10.79. During the same time period, its PEG ratio has been as high as 1.02, as low as 0.51, with a median of 0.77.

Furthermore, Lincoln Educational Services holds a P/B ratio of 1.36 and its industry's price-to-book ratio is 1.85. LINC's P/B has been as high as 2.30, as low as 1.06, with a median of 1.68 over the past 12 months.

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


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