Is Afya (AFYA) Stock Undervalued Right Now?

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One company value investors might notice is Afya (AFYA). AFYA is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.36, while its industry has an average P/E of 14.95. AFYA's Forward P/E has been as high as 12.39 and as low as 7.81, with a median of 9.32, all within the past year.

AFYA is also sporting a PEG ratio of 0.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AFYA's PEG compares to its industry's average PEG of 0.68. 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 notable valuation metric for AFYA is its P/B ratio of 1.86. 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. This stock's P/B looks attractive against its industry's average P/B of 3.38. Within the past 52 weeks, AFYA's P/B has been as high as 2.42 and as low as 1.75, with a median of 2.09.

These are just a handful of the figures considered in Afya's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AFYA is an impressive value stock right now.

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This article originally published on Zacks Investment Research (zacks.com).

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