Is Celestica (CLS) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Celestica (CLS). CLS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.16. This compares to its industry's average Forward P/E of 13.11. Over the past year, CLS's Forward P/E has been as high as 16.31 and as low as 3.61, with a median of 10.09.
CLS is also sporting a PEG ratio of 0.90. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CLS's industry currently sports an average PEG of 1.04. CLS's PEG has been as high as 7.66 and as low as 0.63, with a median of 4.56, all within the past year.
We should also highlight that CLS has a P/B ratio of 0.80. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.79. CLS's P/B has been as high as 0.87 and as low as 0.27, with a median of 0.66, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CLS has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.29.
Value investors will likely look at more than just these metrics, but the above data helps show that Celestica is likely undervalued currently. And when considering the strength of its earnings outlook, CLS sticks out at as one of the market's strongest value stocks.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.