For those who appreciate growth without the sticker shock, CELESTICA INC (NYSE:CLS) is worth considering.

CELESTICA INC (NYSE:CLS) was identified as an affordable growth stock by our stock screener. CLS is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Growth Assessment of 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. CLS has achieved a 8 out of 10:

• CLS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 61.32%, which is quite impressive.
• CLS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 48.11% yearly.
• CLS shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.17%.
• The Revenue has been growing by 10.38% on average over the past years. 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 24.42% on average per year.
• CLS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.06% yearly.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Understanding CLS's Valuation

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. CLS boasts a 5 out of 10:

• Compared to the rest of the industry, the Price/Earnings ratio of CLS indicates a somewhat cheap valuation: CLS is cheaper than 68.29% of the companies listed in the same industry.
• CLS is valuated rather cheaply when we compare the Price/Earnings ratio to 28.68, which is the current average of the S&P500 Index.
• CLS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CLS is cheaper than 71.54% of the companies in the same industry.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CLS indicates a somewhat cheap valuation: CLS is cheaper than 60.16% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, CLS is valued a bit cheaper than 65.04% 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 a very decent profitability rating, which may justify a higher PE ratio.
• CLS's earnings are expected to grow with 22.07% in the coming years. This may justify a more expensive valuation.

Health Analysis for CLS

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. CLS has achieved a 5 out of 10:

• An Altman-Z score of 3.49 indicates that CLS is not in any danger for bankruptcy at the moment.
• CLS's Altman-Z score of 3.49 is fine compared to the rest of the industry. CLS outperforms 64.23% of its industry peers.
• The Debt to FCF ratio of CLS is 2.47, which is a good value as it means it would take CLS, 2.47 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of CLS (2.47) is better than 70.73% of its industry peers.
• A Debt/Equity ratio of 0.49 indicates that CLS is not too dependend on debt financing.
• Even though the debt/equity ratio score it not favorable for CLS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

Analyzing Profitability Metrics

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, CLS has achieved a 7:

• With an excellent Return On Assets value of 6.36%, CLS belongs to the best of the industry, outperforming 80.49% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 20.73%, CLS belongs to the top of the industry, outperforming 91.06% of the companies in the same industry.
• The Return On Invested Capital of CLS (14.36%) is better than 92.68% of its industry peers.
• CLS's Profit Margin of 4.08% is fine compared to the rest of the industry. CLS outperforms 69.11% of its industry peers.
• CLS's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 5.61%, CLS is in the better half of the industry, outperforming 69.11% 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.

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.