Is Celestica Inc. (CLS) overvalued?
On Equity Rank's model estimate, CLS trades 12% above its fair value. Celestica Inc. (CLS) last closed at $206.68; the multi-method model fair value is $183.65.
| Price | Model fair value | Price vs model |
|---|---|---|
| $206.68 | $183.65 | 13% above |
What the answer rests on
- 2 of 8 valuation methods put CLS's value above its price and 6 put it below, so the methods mostly agree.
- To justify today's price, CLS's free cash flow would need to grow about 25.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 65.0% a year.
- CLS trades at 22.3 times its last year's earnings, against a median of 26.1 for 34 profitable Hardware companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 12% above to 110% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind CLS's fair value · What prices assume · Other companies