Celestica Inc. (CLS) on Decifer

Decifer ranks CLS number 75 of 277 tracked names on durable business quality.

Why it ranks here

• It earns strong returns on the money it puts to work, around 28% and those returns have been improving.
• Revenue is expected to grow about 60% a year, profits grew 103% over the past year, and growth is speeding up, not slowing down.
• It keeps a thin share of every sale as profit, and that has stayed steady over the years, a sign of real pricing power, with profitability widening as it grows.
• It is riding an active market tailwind and has the balance sheet to fund its growth.
• It is not watering down its owners with new shares and it returns cash to shareholders.
• Our durability check found pressure on this name, which costs it a few points.
• Its profit margin and growth are both unusually high right now compared to its own history, the kind of combination that often fades once conditions normalize.
• Strong returns around 28% and profits up 103% are impressive, but thin margins, durability pressure, a margin and growth pop that tends to fade, and momentum of 10 out of 35 temper it.

The current read

The evidence on CLS lines up on the supportive side: a live market force supports this name through its theme connection. One signal disagrees: the longer-term story is intact, but price is not rewarding it: semiconductor stocks are down 7.3% this week. The drop is large enough to signal near-term caution, worth watching but not the weight of the evidence.

Themes

• Networking & Connectivity: Celestica Inc. operates in hardware, equipment & parts. That places it inside the Networking & Connectivity story.

Read the full CLS research brief · See all quality rankings

Intelligence data powered by Decifer. Not financial advice. For informational purposes only.