NYSE:CLS stands out as a stock that provides good value for the fundamentals it showcases.

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 We Gauge 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 7 reflects its valuation:

• Based on the Price/Earnings ratio, CLS is valued cheaply inside the industry as 81.10% of the companies are valued more expensively.
• Compared to an average S&P500 Price/Earnings ratio of 24.29, CLS is valued a bit cheaper.
• Based on the Price/Forward Earnings ratio, CLS is valued a bit cheaper than 79.53% of the companies in the same industry.
• CLS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.35, which is the current average of the S&P500 Index.
• 77.95% of the companies in the same industry are more expensive than CLS, based on the Enterprise Value to EBITDA ratio.
• 78.74% of the companies in the same industry are more expensive than CLS, based on the Price/Free Cash Flow ratio.
• CLS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of CLS may justify a higher PE ratio.
• A more expensive valuation may be justified as CLS's earnings are expected to grow with 22.66% in the coming years.

Exploring NYSE:CLS's Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:CLS was assigned a score of 8 for profitability:

• CLS's Return On Assets of 5.63% is fine compared to the rest of the industry. CLS outperforms 75.59% of its industry peers.
• CLS has a better Return On Equity (18.79%) than 88.98% of its industry peers.
• CLS has a better Return On Invested Capital (13.35%) than 88.98% 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 66.14% of the companies in the same industry.
• In the last couple of years the Profit Margin of CLS has grown nicely.
• With a decent Operating Margin value of 5.66%, CLS is doing good in the industry, outperforming 68.50% of the companies in the same industry.
• In the last couple of years the Operating Margin of CLS has grown nicely.
• CLS's Gross Margin has improved in the last couple of years.

Health Assessment of NYSE:CLS

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:CLS has earned a 5 out of 10:

• CLS has a debt to FCF ratio of 2.34. This is a good value and a sign of high solvency as CLS would need 2.34 years to pay back of 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 69.29% 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.

Growth Assessment of NYSE:CLS

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:CLS has received a 7 out of 10:

• The Earnings Per Share has grown by an impressive 51.43% over the past year.
• The Earnings Per Share has been growing by 17.61% on average over the past years. This is quite good.
• The Revenue has grown by 9.81% in the past year. This is quite good.
• Based on estimates for the next years, CLS will show a very strong growth in Earnings Per Share. The EPS will grow by 22.66% on average per year.
• The Revenue is expected to grow by 14.09% on average over the next years. This is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
• 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.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

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

Keep in mind

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.