Afya (AFYA)
Afya (NASDSAQ:AFYA) is making waves in Brazil’s education scene. In the third quarter of 2023, Afya posted impressive financial growth, with adjusted net income up 24.6% year-over-year (YOY).
Even excluding acquisitions, the company posted solid 13.6% growth in adjusted net income, reaching 659.0 million Brazilian Real (R$). This success translated into a 21.7% YOY increase in adjusted EBITDA, which reached R$278.4 million, with a healthy margin of 38.5%.
In a strategic move, they recently completed a major acquisition valued at R$825.0 million. For their investment, AFYA now owns 100% of the share capital of Sociedade Educacional e Cultural Sergipe DelRey Ltda. This move not only expands the number of places at the Afya Medical School to 3,163, but also strengthens its presence in the Brazilian Northeast, venturing into a new state in the region.
Strategic Education (STRA)
Strategic Education (NASDAQ:STRA) is one of the edtech stocks making waves in the education sector. STRA enjoyed a stellar performance in the third quarter with an 8.7% increase in revenue to $285.9 million.
The company’s dedication to serving working adult learners is evident in its strong financial results. Income from operations soared to $25.6 million, constituting 9% of revenue, a significant jump from the previous year.
The U.S. higher education segment, which encompasses Strayer University and Capella University, saw a notable 9.9% increase in enrollment to 82,548 students. FlexPath enrollment accounted for 22% of the segment’s enrollment, indicating continued growth.
Beyond the financial data, STRA conducted a revealing national study in which it found that, overall, employees are happier in their current positions than they were in the previous year. At the same time the study also highlighted employees’ increased expectations for the benefits of education. 87% of respondents expressed the belief that companies should invest in their continuing education.
Graham Holdings (GHC)
Graham Holdings (NYSE:GHC) is a dynamic education and media company based in Arlington, Virginia.
Despite posting a net loss in the third quarter of 2023, attributed to various financial factors, GHC has been making strategic moves in the automotive sector. The company’s 90% stake in Graham Ourisman Automotive led to the acquisition of a Toyota dealership in Henrico, Virginia, and the exciting prospect of launching a KIA dealership later this year. These initiatives underscore the company’s commitment to diversification and expansion in the automotive sector.
Additionally, Graham Holdings’ Board of Directors has shown its confidence in the value of the company. They have authorized the repurchase of up to 500,000 shares of Class B common stock. This strategic move underscores the company’s belief in its long-term growth and stability. The share repurchase initiative, combined with developments in the automotive sector, positions Graham Holdings as an intriguing prospect for investors seeking opportunities in edtech stocks.
As of this writing, Gabriel Osorio-Mazzilli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.