Recently, Zacks.com users have been paying close attention to Celestica (CLS). This makes it worthwhile to examine what the stock has in store.
Celestica's revenue rose 21% year-over-year to $9.65B, fueled by CCS growth; FCF jumped 50% amid buybacks and low leverage, indicating strong fundamentals. HPS design capabilities expand margins, forging durable ties across AI, defense, and data centers, with multi-year production programs reinforcing stability. Risks include Thailand/China exposure, big-customer reliance, and AI capex cycles, yet Celestica's outlook remains bullish with ~30% upside potential.
Celestica is my top AI Connectivity pick for 2025 due to booming AI business, strong management, and increased hyperscaler capex towards its cloud communication products. Celestica's CCS segment saw massive demand in 2024 with increasing market share, leading to upgraded 2025 revenue targets of $10.7 billion, driven by its Ethernet-based switches. Despite thin margins, Celestica's pivot to design and solution partnerships is enhancing margins and positioning the company for long-term rewards.
Recently, Zacks.com users have been paying close attention to Celestica (CLS). This makes it worthwhile to examine what the stock has in store.
Celestica reported Q4-CY24 revenue of $2.55B (+19% YoY), with CCS segment revenue surging 30% YoY to $1.74B. Full-year CY25 revenue is projected at $10.7B (+11% YoY), with adjusted EPS expected to hit $4.75 (+22% YoY). HPS within CCS grew 65% YoY, driven by AI-driven data center and networking demand.
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 rated as a "Strong Buy" due to a 40% stock dip, presenting a golden buying opportunity for GARP investors. Despite tariff concerns, CLS's EPS growth, high operating margins, and strong demand from hyperscaler customers make the stock significantly undervalued by at least 31%. The company's transition to higher-value ODM services and robust CCS segment growth position it well for long-term stability and profitability.
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.
Celestica (CLS) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, CLS broke through the 50-day moving average, which suggests a short-term bullish trend.
Pulling back from their 52-week highs, these top-rated stocks are viable options for long-term positions in the portfolio.
The average of price targets set by Wall Street analysts indicates a potential upside of 26.8% in Celestica (CLS). While the effectiveness of this highly sought-after metric is questionable, the positive trend in earnings estimate revisions might translate into an upside in the stock.
Celestica's strong Q4 performance and robust FY2025 guidance, driven by AI tailwinds and data center spending, support a "Strong buy" rating. The stock's valuation is attractive, with a DCF model indicating a 38% upside potential, even under conservative growth assumptions. Celestica's financial flexibility, low RSI levels, and significant momentum make it well-positioned for continued growth and value creation.