Celestica (CLS) closed at $130.73 in the latest trading session, marking a +2.38% move from the prior day.
CLS faces ongoing margin pressure despite AI-driven growth and U.S. policy relief for key data center hardware.
Since my April 'buy' upgrade, Celestica's stock surged 85%. I remain bullish, citing strong fundamentals and expecting new highs despite recent gains near all-time highs. Q1 FY 2025 saw a record 7.1% EBIT margin, with sales up 19.9% and EPS +39.5%. I see the CCS segment, fueled by hyperscaler AI demand (HPS +99% YoY), driving growth. I believe the shift to higher-margin CCS (7.9% margin) and new 1.6T switch wins underpin the raised FY 2025 guidance: $10.85B revenue, $5.00 EPS, signaling continued operating leverage.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Celestica's Q1 FY 2025 HPS revenue surged 99% YoY to $1B, now representing 39% of total company revenue. Full-year FY 2025 revenue guidance was raised to $10.85B, supported by 800G momentum and 1.6T switch program wins. The PEG ratio (GAAP, TTM) of 0.9x highlights undervaluation relative to 48.9% YoY EBIT growth vs. the sector's 11.3%.
In the closing of the recent trading day, Celestica (CLS) stood at $119.90, denoting a -1.12% change from the preceding trading day.
CLS surges 24.3% in 3 months, outpacing peers as AI-fueled demand lifts its data center and networking solutions.
Celestica (CLS) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
In the latest trading session, Celestica (CLS) closed at $116.37, marking a -1.48% move from the previous day.
Celestica's stock has massively outperformed since 2022, but current valuations mirror Dot-com 2000 bubble extremes, making the risk/reward balance unattractive. Valuation metrics have surged: high P/E and price-to-sales ratios, matched with ultra-low free cash flow yield, now require continued high-growth rates to justify current pricing. Insider selling has been significant (especially above $120), with management dumping most of their shares during 2024–25, signaling a lack of confidence in further upside.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price.
Celestica is a lesser-known AI hardware and supply chain play, offering exposure to AI trends without high risk or overvaluation. Despite a low gross profit margin, CLS boasts strong ROE and exceptional revenue and EBITDA growth, outpacing industry averages and peers. Valuation is attractive: CLS trades at lower EV/EBITDA and P/S ratios than most AI peers, with growth prospects superior to similarly valued companies.