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After an extraordinary multi year run, Celestica’s share price now screens as undervalued on both its intrinsic value estimate using a Discounted Cash Flow (DCF) approach and on market multiples. This raises the question of how much of the recent enthusiasm is actually reflected in the current price.
Celestica has delivered a very large return for shareholders over the past 5 years, which puts extra focus on whether the present valuation still leaves room for attractive long term outcomes.
The recent 3.45b equity raise to support growth in AI infrastructure and data center Ethernet networking can support future investment capacity, while the enlarged share base may weigh on per share valuation if those funds are not deployed efficiently.
Celestica scores highly on the broader valuation checks, with the stock screening as undervalued on 5 of 6 measures on the valuation summary. This points to a discount relative to several fundamental yardsticks.
The stock’s next move may depend on whether the current discount to intrinsic value and multiples offers enough margin of safety after such a strong multi year performance.
Find out why Celestica’s 68.7% return over the last year is lagging behind its peers.
Is Celestica Still Cheap on Cash Flow?
The Discounted Cash Flow (DCF) model here values Celestica based on the cash it is expected to generate for shareholders. Celestica produced latest twelve month free cash flow of about $731 million, and the model assumes these cash flows continue to grow from this base. On that set of projections, the 2 Stage Free Cash Flow to Equity framework points to an estimated intrinsic value of around CA$692 per share.
Set against the current share price, that estimate implies the stock is about 37.6% undervalued. The recent CA$3.45b equity raise to fund AI infrastructure and data center Ethernet networking helps explain why the model leans on higher future cash generation, even as the larger share count dilutes ownership. Despite that capital raise adding support for the growth plan, the market price still sits well below what the DCF suggests those projected cash flows are worth.
On this DCF view, Celestica stock currently screens as undervalued relative to its projected cash flows.
Our Discounted Cash Flow (DCF) analysis suggests Celestica is undervalued by 37.6%. Track this in your watchlist or portfolio, or discover 11 more high quality undervalued stocks.
Story Continues
CLS Discounted Cash Flow as at Aug 2026
Is Celestica a Bargain on Earnings?
P/E is a useful cross check for Celestica because earnings are a key focus for investors alongside cash flow. Celestica currently trades at a P/E of about 32.0x, which is above the electronic industry average of roughly 28.2x but below the broader peer group average of about 42.2x.
The fair P/E ratio estimate for Celestica is 54.7x based on its own profile rather than just the sector average. Compared with the current 32.0x, this framework implies the stock trades at a discount, even after factoring in the higher growth ambitions around AI infrastructure and data center Ethernet networking.
On this earnings multiple view, Celestica stock appears undervalued relative to the P/E level implied by its fundamentals and peer group.
TSX:CLS P/E Ratio as at Aug 2026
See what the numbers say about this price — find out in our valuation breakdown.
The Celestica Narrative: What Would Justify Today’s Price?
Narratives on Celestica’s Community page pick up where the valuation puzzle stops and spell out what would need to happen to Celestica’s growth, margins and earnings for the stock to be worth materially more or less than today’s price. Rather than relying on a single multiple or DCF output, each narrative sets out the assumptions behind its fair value so you can track those expectations against future reported results.
You can add your voice to the Simply Wall St community by sharing a data driven Narrative on Celestica that sets out your case in numbers and tracks how it holds up as new results land. If you have a view on whether Celestica’s recent 3.45b equity raise for AI infrastructure and data center Ethernet networking ultimately delivers for shareholders, this is a chance to put that view on the record.
Do you think there’s more to the story for Celestica? Head over to our Community to see what others are saying!
The Bottom Line
Celestica screens as undervalued on both the Discounted Cash Flow (DCF) intrinsic value estimate and on earnings-based multiples, which is a rare level of agreement between methods. The recent equity raise increases both the potential to grow cash flows and the execution risk if that capital is not turned into solid returns. The crux for investors now is whether Celestica can convert its AI and data center ambitions into sustained cash generation that justifies the intrinsic value estimate, rather than the market being correct to keep pricing in a discount.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include CLS.TO.
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