Celestica (CLS) is an Incredible Growth Stock: 3 Reasons Why

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task.In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.However, it's pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.Our proprietary system currently recommends Celestica (CLS) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.Studies have shown that stocks with the best growth features consistently outperform the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).Here are three of the most important factors that make the stock of this electronics manufacturing services company a great growth pick right now.Earnings GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.While the historical EPS growth rate for Celestica is 37.7%, investors should actually focus on the projected growth. The company's EPS is expected to grow 43% this year, crushing the industry average, which calls for EPS growth of 17.5%.Cash Flow GrowthCash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because, high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.Right now, year-over-year cash flow growth for Celestica is 34.1%, which is higher than many of its peers. In fact, the rate compares to the industry average of -12.4%.While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 22.4% over the past 3-5 years versus the industry average of 3.7%.Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.The current-year earnings estimates for Celestica have been revising upward. The Zacks Consensus Estimate for the current year has surged 12.6% over the past month.Bottom LineWhile the overall earnings estimate revisions have made Celestica a Zacks Rank #1 stock, it has earned itself a Growth Score of B based on a number of factors, including the ones discussed above.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.This combination positions Celestica well for outperformance, so growth investors may want to bet on it.Should You Invest in Celestica, Inc. (CLS)?Before you invest in Celestica, Inc. (CLS), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy.Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Celestica, Inc. (CLS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks