Rating Change #9
Celestica (CLS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- CLS's revenue growth has slightly outpaced the industry average of 15.1%. Since the same quarter one year prior, revenues rose by 15.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CELESTICA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, CELESTICA INC increased its bottom line by earning $0.34 versus $0.23 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 849.2% when compared to the same quarter one year prior, rising from -$6.10 million to $45.70 million.
- Net operating cash flow has significantly increased by 223.25% to $5.30 million when compared to the same quarter last year. In addition, CELESTICA INC has also vastly surpassed the industry average cash flow growth rate of -49.44%.
- CLS's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
Celestica Inc. provides electronics manufacturing services and solutions to original equipment manufacturers (OEMs) in the consumer, communications, enterprise computing, industrial, aerospace and defense, healthcare, and green technology sectors in Asia, the Americas, and Europe. The company has a P/E ratio of 16.2, above the average electronics industry P/E ratio of 13.5 and below the S&P 500 P/E ratio of 17.7. Celestica has a market cap of $1.8 billion and is part of the technology sector and electronics industry. Shares are down 15.1% year to date as of the close of trading on Wednesday.You can view the full Celestica Ratings Report or get investment ideas from our investment research center.