Is Afya (AFYA) Stock Undervalued Right Now?

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). 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.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research