NYSE:CLS is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Last update: Nov 2, 2023

Discover CELESTICA INC (NYSE:CLS), an undervalued stock highlighted by our stock screener. NYSE:CLS showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

How do we evaluate the Valuation for NYSE:CLS?

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:CLS, the assigned 8 reflects its valuation:

The Price/Earnings ratio is 10.83, which indicates a very decent valuation of CLS.
84.00% of the companies in the same industry are more expensive than CLS, based on the Price/Earnings ratio.
CLS is valuated cheaply when we compare the Price/Earnings ratio to 23.21, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 9.39, the valuation of CLS can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CLS indicates a rather cheap valuation: CLS is cheaper than 88.00% of the companies listed in the same industry.
CLS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 18.26.
Based on the Enterprise Value to EBITDA ratio, CLS is valued cheaply inside the industry as 86.40% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CLS is valued cheaply inside the industry as 91.20% of the companies are valued more expensively.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of CLS may justify a higher PE ratio.
CLS's earnings are expected to grow with 16.02% in the coming years. This may justify a more expensive valuation.

Analyzing Profitability Metrics

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:CLS, the assigned 6 is noteworthy for profitability:

With a decent Return On Equity value of 11.68%, CLS is doing good in the industry, outperforming 72.80% of the companies in the same industry.
CLS's Return On Invested Capital of 10.12% is fine compared to the rest of the industry. CLS outperforms 73.60% of its industry peers.
The last Return On Invested Capital (10.12%) for CLS is above the 3 year average (5.77%), which is a sign of increasing profitability.
CLS's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 4.61%, CLS is in the better half of the industry, outperforming 62.40% of the companies in the same industry.
CLS's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of CLS has grown nicely.

A Closer Look at Health for NYSE:CLS

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:CLS, the assigned 5 reflects its health status:

The Debt to FCF ratio of CLS is 2.95, which is a good value as it means it would take CLS, 2.95 years of fcf income to pay off all of its debts.
CLS has a Debt to FCF ratio of 2.95. This is in the better half of the industry: CLS outperforms 73.60% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that CLS is not too dependend on debt financing.

Exploring NYSE:CLS's Growth

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:CLS was assigned a score of 6 for growth:

The Earnings Per Share has grown by an impressive 24.58% over the past year.
The Earnings Per Share has been growing by 9.93% on average over the past years. This is quite good.
Looking at the last year, CLS shows a quite strong growth in Revenue. The Revenue has grown by 17.02% in the last year.
CLS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.02% yearly.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of CLS

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.