Contrasting Afya (NASDAQ:AFYA) and KinderCare Learning Companies (NYSE:KLC)

KinderCare Learning Companies (NYSE:KLC) and Afya (NASDAQ:AFYA) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for KinderCare Learning Companies and Afya, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KinderCare Learning Companies	3	6	1	0	1.80
Afya	0	7	1	0	2.12

KinderCare Learning Companies currently has a consensus target price of $4.80, suggesting a potential downside of 2.85%. Afya has a consensus target price of $17.10, suggesting a potential upside of 23.02%. Given Afya’s stronger consensus rating and higher possible upside, analysts plainly believe Afya is more favorable than KinderCare Learning Companies.

Risk & Volatility

KinderCare Learning Companies has a beta of 4.2, meaning that its stock price is 320% more volatile than the S&P 500. Comparatively, Afya has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

Insider and Institutional Ownership

88.0% of Afya shares are held by institutional investors. 5.3% of KinderCare Learning Companies shares are held by company insiders. Comparatively, 0.8% of Afya shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares KinderCare Learning Companies and Afya”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KinderCare Learning Companies	$2.74 billion	0.21	-$112.88 million	($3.58)	-1.38
Afya	$3.77 billion	0.35	$134.77 million	$1.53	9.08

Afya has higher revenue and earnings than KinderCare Learning Companies. KinderCare Learning Companies is trading at a lower price-to-earnings ratio than Afya, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares KinderCare Learning Companies and Afya’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KinderCare Learning Companies	-15.48%	8.22%	1.70%
Afya	20.20%	17.94%	9.16%

Summary

Afya beats KinderCare Learning Companies on 11 of the 13 factors compared between the two stocks.

About KinderCare Learning Companies

KinderCare Learning Companies Inc. is a provider of high-quality early childhood education by center capacity. KinderCare Learning Companies Inc. is based in PORTLAND, Ore.

About Afya

Afya Limited, through its subsidiaries, operates as a medical education group in Brazil. The company operates through three segments: Undergrad, Continuing Education, and Digital Services. It offers educational products and services, including medical schools, medical residency preparatory courses, graduate courses, and other programs to lifelong medical learners enrolled across its distribution network, as well as to third-party medical schools. The company also provides digital health services, such as subscription-based mobile app and website portal that focuses on assisting health professionals and students with clinical decision-making through tools, such as medical calculators, charts, and updated content, as well as prescriptions, clinical scores, medical procedures and laboratory exams, and others. It offers health sciences courses, which comprise medicine, dentistry, nursing, radiology, psychology, pharmacy, physical education, physiotherapy, nutrition, and biomedicine; and degree programs and courses in other subjects and disciplines, including undergraduate and post graduate courses in business administration, accounting, law, civil engineering, industrial engineering, and pedagogy. In addition, the company provides medical postgraduate specialization programs; printed and digital content; and an online medical education platform and practical medical training services. The company was founded in 1999 and is headquartered in Nova Lima, Brazil.