Afya Limited (NASDAQ:AFYA) Shares Shorted: Short Interest Up 163.2% in September

Afya Limited (NASDAQ:AFYA) was the recipient of a large growth in short interest in September. As of September 15th, there was short interest totaling 1,411,623 shares, a growth of 163.2% from the August 31st total of 536,316 shares. Based on an average daily trading volume, of 274,094 shares, the short-interest ratio is currently 5.2 days. Currently, 1.5% of the shares of the stock are sold short.

Afya Trading Down 5.3%

AFYA opened at $13.00 on Friday. The company has a debt-to-equity ratio of 0.39, a current ratio of 2.20 and a quick ratio of 2.20. The company’s 50 day simple moving average is $14.00 and its two-hundred day simple moving average is $14.33. Afya has a 1-year low of $12.75 and a 1-year high of $16.16. The firm has a market capitalization of $1.22 billion, a price-to-earnings ratio of 7.93, a price-to-earnings-growth ratio of 1.46 and a beta of 0.35.

Afya (NASDAQ:AFYA) last issued its earnings results on Friday, August 14th. The company reported $0.43 earnings per share for the quarter, topping the consensus estimate of $0.40 by $0.03. The business had revenue of $187.80 million for the quarter, compared to analysts’ expectations of $189.62 million. Afya had a return on equity of 17.58% and a net margin of 20.55%. Analysts expect that Afya will post 1.86 EPS for the current fiscal year.

Insider Transactions at Afya

In related news, VP Lélio de Souza, Jr. sold 36,204 shares of Afya stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $15.00, for a total value of $543,060.00. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Corporate insiders own 0.80% of the company’s stock.

Institutional Trading of Afya

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. Banco BTG Pactual S.A. purchased a new position in shares of Afya during the 4th quarter worth $462,000. Engineers Gate Manager LP purchased a new position in Afya during the second quarter worth about $325,000. Finally, Public Employees Retirement System of Ohio acquired a new position in Afya in the 2nd quarter valued at about $67,000. 88.02% of the stock is owned by institutional investors and hedge funds.

Key Stories Impacting Afya

Here are the key news stories impacting Afya this week:

• Positive Sentiment: Merger creates significant scale. Afya and Yduqs signed a binding agreement to combine their operations, creating a group with approximately 1.6 million students and R$9.4 billion in revenue. Afya shareholders are expected to own about 69.3% of the combined company. Afya Limited and Yduqs Enter Into Merger Agreement
• Positive Sentiment: Potential for stronger cash generation and synergies. Management commentary highlighted faster cash-flow generation and additional consolidation opportunities. Analysts cited potential synergies of as much as R$2.8 billion, while the transaction is also reported to include approximately R$750 million in dividends. JP Morgan merger scenarios
• Positive Sentiment: Analyst valuation remains above the market price. AFYA has a consensus price target of $17.75, implying substantial potential upside from recent trading levels. Afya consensus target price
• Neutral Sentiment: Listing and transaction structure remain important questions. Reports suggest the merger could affect AFYA’s Nasdaq listing, while the share-exchange structure, approvals and integration plans still need to be completed. These uncertainties may be limiting the immediate benefit of the announcement. Afya and Yduqs listing report
• Negative Sentiment: Short interest increased sharply. One report showed short interest rising 163.2% to 1.41 million shares as of September 15, equal to roughly 5.2 days of average volume. A separate report listed zero short interest, indicating inconsistent data; the increase should therefore be treated cautiously. Zacks Strong Sell list
• Negative Sentiment: Near-term sentiment is cautious. Zacks added AFYA to its No. 5, or “Strong Sell,” ranking, adding pressure while investors assess merger execution and the company’s future trading venue.

Analyst Upgrades and Downgrades

AFYA has been the topic of several recent analyst reports. Zacks Research downgraded shares of Afya from a “hold” rating to a “strong sell” rating in a report on Friday, August 21st. Bradesco Corretora upgraded shares of Afya to an “outperform” rating and set a $17.00 price target for the company in a research report on Thursday. JPMorgan Chase & Co. lowered their price objective on Afya from $21.50 to $21.00 and set a “neutral” rating on the stock in a report on Monday, June 22nd. Weiss Ratings lowered Afya from a “hold (c)” rating to a “hold (c-)” rating in a research note on Friday, July 31st. Finally, Bank of America reissued a “neutral” rating on shares of Afya in a report on Thursday, June 11th. One equities research analyst has rated the stock with a Buy rating, five have issued a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat, the company presently has a consensus rating of “Hold” and an average price target of $17.75.

Afya Company Profile

Afya Limited is a Brazilian medical education and technology company that operates an integrated platform for physicians and medical students. The company provides education and professional development throughout the medical career cycle, from undergraduate training and residency preparation to continuing medical education and specialization programs.

Afya’s offerings include medical schools, preparatory courses, postgraduate and continuing education programs, digital learning tools, and clinical practice technologies.