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 better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Risk & Volatility

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

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%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KinderCare Learning Companies	$2.73 billion	0.23	-$112.88 million	($3.58)	-1.49
Afya	$662.01 million	2.02	$134.77 million	$1.53	9.33

Afya has lower revenue, but higher 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets 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	6	1	0	2.14

KinderCare Learning Companies presently has a consensus price target of $4.80, suggesting a potential downside of 10.28%. Afya has a consensus price target of $17.88, suggesting a potential upside of 25.26%. Given Afya’s stronger consensus rating and higher possible upside, analysts clearly believe Afya is more favorable than KinderCare Learning Companies.

Institutional & Insider Ownership

88.0% of Afya shares are owned by institutional investors. 5.3% of KinderCare Learning Companies shares are owned by company insiders. Comparatively, 0.8% of Afya shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Afya beats KinderCare Learning Companies on 10 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.