Hybrid And Digital Education Expansion Will Face Capital Intensity Yet Support Long-Term Stability

Catalysts

About Ânima Holding

Ânima Holding operates a nationwide higher education ecosystem in Brazil, focused on on-campus, hybrid and digital learning, with a strong presence in medical and lifelong education.

What are the underlying business or industry changes driving this perspective?

• Although the expansion of hybrid education under the new regulatory framework creates room to scale premium offerings into new regions, execution through third party partners may dilute brand control and limit pricing power in some markets, constraining upside to revenue growth and net margins.
• Despite strong demand for medical and continuous medical education supporting Inspirali, the proliferation of small medical schools and the need to keep upgrading campuses and clinical infrastructure could raise capital intensity and pressure future earnings growth.
• While the shift toward higher value lifelong learning and graduate programs sustains distance learning ticket growth, intensified competition in digital courses and the company’s decision not to play in the low price segment may cap enrollment expansion, tempering top line acceleration and operating leverage.
• Although ongoing digital transformation and AI projects have driven meaningful efficiency gains, the need to keep CapEx around 25 percent of net revenue to maintain technology and premium facilities risks offsetting part of the operational savings, limiting further margin expansion.
• While a more favorable interest rate environment would enhance the benefits of the company’s operating leverage and cash generation, any delay in rate cuts or renewed macro volatility could prolong higher financial expenses, constraining improvements in net income and slowing deleveraging.

Assumptions

This narrative explores a more pessimistic perspective on Ânima Holding compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts. How have these above catalysts been quantified?

• The bearish analysts are assuming Ânima Holding's revenue will grow by 3.7% annually over the next 3 years.
• The bearish analysts assume that profit margins will increase from 4.0% today to 7.6% in 3 years time.
• The bearish analysts expect earnings to reach R$335.5 million (and earnings per share of R$0.91) by about December 2028, up from R$157.7 million today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as R$727.0 million.
• In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 8.0x on those 2028 earnings, down from 8.4x today. This future PE is lower than the current PE for the BR Consumer Services industry at 8.9x.
• The bearish analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 27.65%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• If the regulatory framework for hybrid and on campus education continues to favor Anima's model, and the company successfully rolls out its partner based expansion across Brazil for the first semester of 2026, the resulting scale gains and operating leverage could drive revenue and earnings meaningfully higher than today. This could support a higher share price through stronger top line growth and expanding net margins.
• Inspirali's medical and continuous medical education initiatives, including new dedicated campuses in major cities and the Eu Medico Residente platform, may unlock a high growth, premium segment with pricing power. This could accelerate long term revenue growth and sustain structurally higher profitability, lifting earnings and potentially re rating the stock.
• The company has shown consistent deleveraging, robust free cash generation and disciplined capital allocation even in a high interest rate environment. Any future decline in Selic or improved credit conditions could translate disproportionately into lower financial expenses, higher net income and rising cash flows, creating upside risk to the share price.
• Anima's ongoing digital transformation and recognized use of AI, alongside continuous product upgrades in distance learning and graduate programs, may strengthen brand differentiation in premium segments over time. This could enable sustained ticket increases and margin expansion, which would support faster revenue growth and higher long term earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bearish price target for Ânima Holding is R$3.4, which represents up to two standard deviations below the consensus price target of R$5.17. This valuation is based on what can be assumed as the expectations of Ânima Holding's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of R$8.0, and the most bearish reporting a price target of just R$3.4.
  
• In order for you to agree with the more bearish analyst cohort, you'd need to believe that by 2028, revenues will be R$4.4 billion, earnings will come to R$335.5 million, and it would be trading on a PE ratio of 8.0x, assuming you use a discount rate of 27.7%.
  
• Given the current share price of R$3.52, the analyst price target of R$3.4 is 3.5% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.