Afya Limited

AI-generated fair value estimate for this company.

Method: 10-year unlevered FCF DCF in USD. FY2026 base (BRL guidance midpoint: revenue R$4,025M, EBITDA R$1,750M/43.5% margin, capex R$360M; H1 OCF conversion 87.8% of EBITDA) converted at 5.15 BRL/USD gives FY2026 FCF ~$225.7M. Growth 8/8/7/7/6% yrs1-5, 5/5/4/4/4% yrs6-10 (Brazil medical-seat regulatory caps slow historically 20-40% growth to high-single-digit). Discount rate 14% (EM risk), terminal growth 4%, EV = PV FCF $1.60B + PV terminal $1.11B = $2.71B; less net debt R$1,394M/$270.7M, equity $2.44B / 88.48M shares = $27.55.

Reasoning: Afya is asset-light and highly cash-generative (capex ~6% of revenue), so a USD-translated unlevered FCF DCF with an EM-appropriate discount rate is more informative than a multiple; the model implies material undervaluation versus current price, consistent with the market pricing heavy Brazil currency/regulatory-risk skepticism beyond what the DCF assumes.