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 (CLS) is well positioned to outperform the market, as it exhibits above-average growth in financials.
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Here is how Celestica (CLS) and Calix (CALX) have performed compared to their sector so far this year.
Celestica's unique CCS offerings and AI-driven business model shift support sustained margin expansion and higher-value revenue streams. Explosive HPS growth is driving significant margin expansion, with EBIT margins exceeding guidance and proving the power of Celestica's high-value business model shift. Following the stellar results, management sharply raised full-year guidance, and Wall Street analysts have rushed to upgrade their estimates and price targets en masse.
Celestica stock is not cheap, but management is operating with undeniable excellence. I expect a near-term price reversion, leading to a Hold rating, despite a 15-20% 16-month return trajectory. The company is delivering exceptional ROIC expansion (up from 26.6% year-over-year to 35.5%). Free cash flow growth is also exceptional, allowing for substantial share buybacks to reward investors. The core risks include a lack of full customer diversification at this stage, and no deep product moat for customer lock-in.
Celestica (CLS) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.
CLS, SBFG, HTB, HLI and UDMY have been added to the Zacks Rank #1 (Strong Buy) List on August 4, 2025.
Celestica (CLS) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
A growing proliferation of AI-based applications and generative AI tools across industries presents robust growth opportunities for Celestica.
Celestica Inc. delivered a blowout Q2 FY25, with a higher-than-usual revenue beat-and-raise. Management's FY25 outlook seems conservative and capex trends by hyperscalers can fuel a continued growth bonanza well into FY26. Celestica's Enterprise sub-segment which until now has been a drag on revenues is expected to see a growth inflection over the next few quarters. The higher-margin hardware platform solutions business continues to outgrow other segments, driving structural margin expansion every quarter. There are no signs of this stopping just yet.
Amazon reports Q2 2025 earnings on July 31, aiming to beat expectations for the 10th straight quarter amid strong tech sector results. While Amazon is best known for its e-commerce business, the company is increasingly reshaping the AI sector through AWS and investments in the industry. Celestica, a key AI infrastructure partner to AWS, posted its largest quarterly beat in two years and raised 2025 revenue and EPS guidance, surging 10% in the post-market.