Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Celestica Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 36.6% to 22.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 78, DPO 70, DIO 101). At a 9.3% WACC with mid-year discounting, the terminal value (110% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 20.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $324.67 per share, suggesting CLS is undervalued by 16.9% at the current price of $277.71.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 876 | 1,224 | 1,587 | 1,941 | 2,374 | 2,433 |
| (−) Net Interest | 111 | 155 | 201 | 246 | 301 | 309 |
| (+) D&A | 132 | 173 | 222 | 290 | 368 | 378 |
| EBITDA | 1,119 | 1,553 | 2,011 | 2,477 | 3,044 | 3,120 |
| (−) Tax | 181 | 253 | 328 | 401 | 491 | — |
| (−) CapEx | 255 | 356 | 462 | 565 | 691 | — |
| (−) ΔWC | 2,045 | 1,989 | 2,070 | 2,020 | 2,471 | — |
| Free Cash Flow (FCF) | -1,361 | -1,046 | -848 | -509 | -609 | — |
| Peers' EBITDA Multiple | 20.8x | |||||
| Terminal Value | 64,985 | |||||
| WACC / Discount Rate | 9.26% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -1,302 | -916 | -680 | -373 | -409 | 41,726 |
| Enterprise Value | 38,046 | |||||
| Projection Period | -3,680 | -9.7% | ||||
| Terminal Value | 41,726 | 109.7% | ||||
| (−) Current Net Debt | 320 | |||||
| Equity Value | 37,727 | |||||
| (÷) Outstanding Shares | 116M | |||||
| Fair Price | $325 | +16.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 16.8x | 18.8x | 20.8x | 22.8x | 24.8x |
|---|---|---|---|---|---|
| 7.3% | $283 | $320 | $358 | $396 | $434 |
| 8.3% | $269 | $305 | $341 | $377 | $413 |
| 9.3% | $256 | $290 | $325 | $359 | $394 |
| 10.3% | $243 | $276 | $309 | $342 | $375 |
| 11.3% | $232 | $263 | $295 | $326 | $358 |
Current price: $277.71. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.