$89.16
arrow_drop_down2.51%Is CLS a Buy or Sell based on AI Analysis?
Fundamental Analysis
Based on the fundamental analysis of Celestica, key indicators highlight the company's financial stability and growth potential. The company's return on equity of 20.99% demonstrates its ability to generate profits from shareholders' investments. Additionally, with a debt-to-equity ratio of 0.53, Celestica maintains a healthy balance between debt and equity, indicating a lower financial risk. The company's price-to-sales ratio of 0.72 suggests that investors are willing to pay less for each dollar of sales, making it an attractive investment option. Furthermore, Celestica's operating margin of 6.1% showcases its efficiency in managing operational costs and generating profits. The company's robust net margin of 3.02% indicates its ability to convert revenue into net income effectively. Additionally, with a current ratio of 1.47, Celestica possesses enough current assets to cover its short-term liabilities, reflecting its strong liquidity position. Overall, these fundamental indicators portray Celestica as a financially sound and well-managed company with promising growth prospects in the market.
Positive Development
Celestica's growth expectations may be priced in since despite a strong outlook from hyperscaler customers. The company has announced the availability of its SC6100, a next-generation, 2U rackmount all-flash storage controller designed to deliver increased performance and high availability for the most demanding enterprise application workloads. The company is considered a solid growth stock, which could handily outperform the market.
Negative Development
The company's profit announcement was underwhelming for investors despite a strong outlook from hyperscaler customers. The stock price has decreased from 54.16 to 53.14 in the past week, indicating a potential correction. The company has a high level of debt with a total debt to equity ratio of 0.5278, which could be a concern for investors.
Technical Analysis
Celestica (CLS) currently has a technical rating of NEUTRAL, as indicated by the various technical indicators used, including ATR and STOCHRSI for Buy signals, MACD, CCI, ADX, WILLR, and ROC for Hold signals, and RSI for a Sell signal. The stock has a beta of 2.26, indicating higher volatility compared to the overall market. The stock has shown a 6.28% decrease in price over the past seven days, and a 14.16% decrease in price over the past three months. However, the stock has seen positive price growth of 22.13% over the past six months and a significant increase of 80.4% year-to-date. The stock's fifty-two weeks high is $63.49 and the low is $20.87. In terms of technical analysis, Celestica's stock has resistance at $59.42 with a 16.51% change in price, and support at $26.88 with a -47.28% change in price. The stock is currently trading above its longest trendline with an upward slope, starting at $20.91 on October 26, 2023, and forecasted to reach $42.71 by September 2, 2024. Additionally, the stock has a technical buy indicator count of 2 and a technical hold indicator count of 5 for the month. Overall, the technical analysis suggests a mix of positive and negative signals for Celestica's stock, signaling potential opportunities for investors to consider.
Conclusion and recommendation
Based on the data provided, Celestica (CLS) appears to be a solid investment opportunity. The company has a strong market score of 83 and a high industry score of 89, indicating a positive market sentiment and industry outlook. With a price-to-book ratio of 3.49 and a price-to-free cash flow ratio of 19.67, Celestica's stock appears to be undervalued, making it an attractive option for value investors. Additionally, the company's impressive five-year price change of 696.87% and year-to-date price change of 80.4% showcase strong growth potential. In conclusion, Celestica shows promising growth prospects with consistent revenue growth and strong financial performance. Despite the recent price drop, the company's fundamentals suggest that it is well-positioned for long-term success. Investors may want to consider adding Celestica to their portfolio, especially those looking for undervalued stocks with strong growth potential. However, as with any investment, it is important to conduct thorough research and consider market conditions before making any investment decisions.