NYSE:CLS, a growth stock which is not overvalued.

Our stock screener has spotted CELESTICA INC (NYSE:CLS) as a growth stock which is not overvalued. NYSE:CLS is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Growth Assessment of NYSE:CLS

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:CLS has achieved a 7 out of 10:

• The Earnings Per Share has grown by an impressive 41.71% over the past year.
• CLS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.61% yearly.
• CLS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.79%.
• CLS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.66% yearly.
• The Revenue is expected to grow by 14.09% on average over the next years. This is quite good.
• 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.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Analyzing Valuation Metrics

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:CLS scores a 6 out of 10:

• Based on the Price/Earnings ratio, CLS is valued a bit cheaper than the industry average as 73.60% of the companies are valued more expensively.
• Compared to an average S&P500 Price/Earnings ratio of 28.36, CLS is valued a bit cheaper.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of CLS indicates a somewhat cheap valuation: CLS is cheaper than 72.80% 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 20.19.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CLS indicates a somewhat cheap valuation: CLS is cheaper than 72.00% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, CLS is valued a bit cheaper than 75.20% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• CLS has an outstanding profitability rating, which may justify a higher PE ratio.
• CLS's earnings are expected to grow with 22.66% in the coming years. This may justify a more expensive valuation.

How do we evaluate the Health for NYSE:CLS?

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:CLS scores a 5 out of 10:

• The Debt to FCF ratio of CLS is 2.34, which is a good value as it means it would take CLS, 2.34 years of fcf income to pay off all of its debts.
• CLS has a Debt to FCF ratio of 2.34. This is in the better half of the industry: CLS outperforms 68.00% of its industry peers.
• CLS has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
• Although CLS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

Exploring NYSE:CLS's Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:CLS has earned a 8 out of 10:

• Looking at the Return On Assets, with a value of 5.63%, CLS is in the better half of the industry, outperforming 76.00% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 18.79%, CLS belongs to the top of the industry, outperforming 88.80% of the companies in the same industry.
• CLS's Return On Invested Capital of 13.35% is amongst the best of the industry. CLS outperforms 88.80% of its industry peers.
• The 3 year average ROIC (8.21%) for CLS is below the current ROIC(13.35%), indicating increased profibility in the last year.
• Looking at the Profit Margin, with a value of 3.86%, CLS is in the better half of the industry, outperforming 66.40% of the companies in the same industry.
• CLS's Profit Margin has improved in the last couple of years.
• CLS has a Operating Margin of 5.66%. This is in the better half of the industry: CLS outperforms 68.80% of its industry peers.
• 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.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Check the latest full fundamental report of CLS for a complete fundamental analysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.