In the world of growth stocks, NYSE:CLS shines as a value proposition.

Last update: Jul 29, 2024

Take a closer look at CELESTICA INC (NYSE:CLS), an affordable growth stock uncovered by our stock screener. NYSE:CLS boasts strong growth prospects and excels in financial health indicators, all while maintaining a reasonable valuation. Let's break it down further.

Deciphering NYSE:CLS's Growth Rating

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:CLS has earned a 7 for growth:

CLS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 51.43%, which is quite impressive.
The Earnings Per Share has been growing by 17.61% 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 9.81% in the last year.
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.
CLS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.09% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Valuation Analysis for NYSE:CLS

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:CLS has received a 7 out of 10:

Based on the Price/Earnings ratio, CLS is valued cheaply inside the industry as 80.31% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 24.43, 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.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.63, CLS is valued a bit cheaper.
Based on the Enterprise Value to EBITDA ratio, CLS is valued a bit cheaper than 77.95% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CLS is valued a bit cheaper than 78.74% 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.
A more expensive valuation may be justified as CLS's earnings are expected to grow with 22.66% in the coming years.

Health Examination for 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 better Debt to FCF ratio (2.34) than 69.29% of its industry peers.
A Debt/Equity ratio of 0.45 indicates that CLS is not too dependend on debt financing.
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.

Looking at the 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:

With a decent Return On Assets value of 5.63%, CLS is doing good in the industry, outperforming 75.59% of the companies in the same industry.
CLS's Return On Equity of 18.79% is amongst the best of the industry. CLS outperforms 90.55% of its industry peers.
CLS has a better Return On Invested Capital (13.35%) than 88.98% of its industry peers.
The last Return On Invested Capital (13.35%) for CLS is above the 3 year average (8.21%), which is a sign of increasing profitability.
CLS has a better Profit Margin (3.86%) than 66.14% of its industry peers.
In the last couple of years the Profit Margin of CLS has grown nicely.
Looking at the Operating Margin, with a value of 5.66%, CLS is in the better half of 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.
In the last couple of years the Gross Margin of CLS has grown nicely.

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

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.