NYSE:CLS: good value for what you're paying.

Our stock screening tool has pinpointed CELESTICA INC (NYSE:CLS) as an undervalued stock option. NYSE:CLS retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Looking at the Valuation

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 7 out of 10:

• CLS's Price/Earnings ratio is rather cheap when compared to the industry. CLS is cheaper than 81.75% of the companies in the same industry.
• The average S&P500 Price/Earnings ratio is at 29.72. CLS is valued slightly cheaper when compared to this.
• CLS's Price/Forward Earnings ratio is rather cheap when compared to the industry. CLS is cheaper than 83.33% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of CLS to the average of the S&P500 Index (20.97), we can say CLS is valued slightly cheaper.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CLS indicates a somewhat cheap valuation: CLS is cheaper than 76.98% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, CLS is valued a bit cheaper than 75.40% of the companies in the same industry.
• CLS's 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.

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 8 is noteworthy for profitability:

• With a decent Return On Assets value of 6.22%, CLS is doing good in the industry, outperforming 78.57% of the companies in the same industry.
• CLS has a better Return On Equity (20.28%) than 92.06% of its industry peers.
• CLS has a better Return On Invested Capital (13.13%) than 88.89% of its industry peers.
• The last Return On Invested Capital (13.13%) for CLS is above the 3 year average (8.21%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 4.16%, CLS is in the better half of the industry, outperforming 67.46% of the companies in the same industry.
• In the last couple of years the Profit Margin of CLS has grown nicely.
• Looking at the Operating Margin, with a value of 5.68%, CLS is in the better half of the industry, outperforming 68.25% of the companies in the same industry.
• CLS's Operating Margin has improved in the last couple of years.
• CLS's Gross Margin has improved in the last couple of years.

Health Assessment of NYSE:CLS

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:CLS was assigned a score of 5 for health:

• The Debt to FCF ratio of CLS is 2.77, which is a good value as it means it would take CLS, 2.77 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of CLS (2.77) is better than 65.87% of its industry peers.
• CLS has a Debt/Equity ratio of 0.49. This is a healthy value indicating a solid balance between debt and equity.

Growth Insights: 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 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.
• CLS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.45%.
• 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.

More Decent Value stocks can be found in our Decent Value screener.

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

Keep in mind

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.