Celestica (CLS) AI Stock Analysis

• Market Cap: C$40.38B
• Dividend Yield: N/A
• Average Volume (3M): 637.03K
• Price to Earnings (P/E): 40.2
• Beta (1Y): 2.68
• Revenue Growth: 25.34%
• EPS Growth: 109.17%
• Country: CA
• Employees: 21,914
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 2.56
• Shares Outstanding: 114,967,860
• 10 Day Avg. Volume: 522,276
• 30 Day Avg. Volume: 637,032
• PEG Ratio: 0.39
• Price to Book (P/B): 15.41
• Price to Sales (P/S): 2.70
• P/FCF Ratio: 73.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$518.37
• Price Target Upside: 40.41% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 12.14
• Revenue Forecast (FY): C$23.54B

• Rating: 72 Outperform
• Price Target: C$480.00 ▲(30.01% Upside)
• Action: Reiterated Date: 01/31/26
• Date: Action: Reiterated 01/31/26

The score is driven primarily by strong fundamentals (accelerating growth, expanding margins, improving leverage) and a very bullish earnings outlook with raised 2026 guidance. Offsetting this are weaker near-term technicals (trading below key short/mid-term moving averages) and a demanding valuation (P/E ~38), plus execution/working-capital risks tied to the large 2026 capacity investment plan.

Positive Factors

Revenue & Margin Acceleration

Celestica’s multi-year revenue acceleration and material margin expansion into 2025 signal durable operational leverage. Higher margins and scale improve earnings resilience, fund reinvestment and buybacks, and reduce cyclicality risk versus prior low-margin periods, supporting sustained profitability.

Improving Cash Generation & Leverage

Stronger operating cash flow and rising free cash flow alongside falling leverage provide durable financial flexibility. This cash base supports the planned capex, liquidity needs, and shareholder returns while lowering refinancing and solvency risks through the multi-year growth cycle.

Hyperscaler Design Wins & CCS Momentum

Large, multi‑year hyperscaler design wins and rapid CCS/HPS growth create structural demand visibility. These engagements drive recurring volume, higher utilization and long product lifecycles, supporting durable revenue streams and justifying capacity investments over several years.

Negative Factors

Sharp CapEx Ramp & Execution Risk

A fivefold increase in capital intensity over one year elevates execution, timing and cost risks. Successful deployment across Texas, Thailand and other sites is required to realize forecasted AI/networking volumes; delays or cost overruns could compress margins and strain cash conversion for multiple quarters.

Customer Concentration

Heavy dependence on a small number of large hyperscaler customers raises revenue and negotiating risk. A shift in a single customer’s procurement or design cadence could materially swing volumes and margins, making long‑term forecasts sensitive to a few counterparties rather than broad end‑market diversification.

Inventory Build & Thin Gross Margins

A large inventory build to support CCS ramps increases working capital and ties up cash, while structurally thin gross margins (~11.7%) leave limited buffer versus input cost inflation. Combined, these factors heighten cash conversion variability and pressure on returns if ASPs or supply costs change.

Celestica Business Overview & Revenue Model

Company Description

Celestica Inc. provides hardware platform and supply chain solutions in North America, Europe, and Asia. It operates through two segments, Advanced Technology Solutions, and Connectivity & Cloud Solutions. The company offers a range of product manufacturing and related supply chain services, including design and development, engineering, supply chain management, new product introduction, component sourcing, electronics manufacturing and assembly, testing, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics, asset management, product licensing, and after-market repair and return services. It also provides enterprise-level data communications and information processing infrastructure products, such as routers, switches, data center interconnects, edge solutions, servers, and storage-related products; capacitors, microprocessors, resistors, and memory modules; and power inverters, energy storage products, smart meters, and other electronic componentry products. The company serves aerospace and defense, industrial, energy, healthtech, capital equipment, original equipment manufacturers, cloud-based, and other service providers, including hyperscalers, and other companies in a range of industries. Celestica Inc. was incorporated in 1994 and is headquartered in Toronto, Canada.

How the Company Makes Money

Celestica generates revenue primarily through its diversified service offerings, which include electronics manufacturing services (EMS), design and engineering solutions, and supply chain management. The company earns money by providing these services to original equipment manufacturers (OEMs) and other businesses looking for reliable manufacturing partners. Key revenue streams include contract manufacturing, where Celestica produces components and assemblies for its clients, and after-market services, which involve repairs and maintenance of electronic products. Significant partnerships with major technology companies and a commitment to developing advanced manufacturing capabilities also contribute to its earnings, positioning Celestica as a trusted partner in the increasingly complex technology landscape.

Celestica Financial Statement Overview

Summary

Strong multi-year revenue acceleration and a clear step-up in profitability (net margin up to ~6.7% and EBIT margin ~8.4% in 2025). Leverage is improving (debt-to-equity down to ~0.35) and free cash flow growth was strong in 2025, but gross margins remain structurally thin and cash conversion/working capital has shown some variability.

Income Statement

Celestica shows a strong multi-year growth and profitability trajectory. Revenue accelerated meaningfully from 2023 to 2025 (2025 up ~12% vs. 2024, after ~10% growth in 2023), while profitability expanded sharply: net margin improved from ~1.1% (2020) to ~6.7% (2025) and EBIT margin rose to ~8.4% (2025). Gross margin remains relatively thin for the sector (~11.7% in 2025), and the business has historically seen periods of weaker growth (revenue declines in 2020–2021), but the recent step-up in scale and margins is a clear positive.

Balance Sheet

Leverage appears manageable and improving, with debt-to-equity declining from ~0.54 (2021) to ~0.35 (2025) alongside steady equity growth. Returns to shareholders have strengthened materially (return on equity up to ~38% in 2025 from low single-digits in 2020), reflecting the earnings ramp. The main watch item is that returns are very high relative to a still moderate equity base, which can amplify volatility if profitability normalizes, but overall balance-sheet risk looks contained given the current leverage profile.

Cash Flow

Cash generation is solid and improving: operating cash flow rose to ~$671M in 2025 and free cash flow increased to ~$466M with strong growth in 2025 (~42%). Free cash flow has generally tracked earnings reasonably (free cash flow at ~69% of net income in 2025; similar levels in prior years). A key weakness is that operating cash flow is a relatively small share of revenue (roughly ~5% in 2025), and cash flow growth has been somewhat uneven year-to-year (e.g., softer free cash flow growth in 2024), indicating some variability in cash conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.61B	9.65B	7.96B	7.25B	5.63B
Gross Profit	1.47B	1.03B	778.50M	636.30M	487.00M
EBITDA	1.23B	736.20M	545.30M	408.10M	294.00M
Net Income	847.07M	428.00M	244.60M	145.50M	103.90M
Balance Sheet
Total Assets	7.20B	5.99B	5.89B	5.63B	4.67B
Cash, Cash Equivalents and Short-Term Investments	594.52M	423.30M	372.60M	374.50M	394.00M
Total Debt	775.09M	796.70M	782.80M	786.10M	794.40M
Total Liabilities	4.99B	4.09B	4.12B	3.95B	3.20B
Stockholders Equity	2.21B	1.90B	1.77B	1.68B	1.46B
Cash Flow
Free Cash Flow	466.32M	303.00M	304.60M	188.90M	174.60M
Operating Cash Flow	671.04M	473.90M	429.70M	297.90M	226.80M
Investing Cash Flow	-207.27M	-212.50M	-122.40M	-108.90M	-364.30M
Financing Cash Flow	-288.46M	-208.50M	-311.40M	-208.50M	67.70M

Celestica Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 369.19
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CLS, the sentiment is Negative. The current price of 369.19 is below the 20-day moving average (MA) of 393.98, below the 50-day MA of 409.09, and above the 200-day MA of 334.42, indicating a neutral trend. The MACD of -11.51 indicates Positive momentum. The RSI at 35.52 is Neutral, neither overbought nor oversold. The STOCH value of 13.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CLS.

Celestica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZTE	76 Outperform	C$10.71M	6.25	18.01%	―	-17.91%	-54.21%
CLS	72 Outperform	C$40.38B	40.24	40.49%	―	25.34%	109.17%
PNG	62 Neutral	C$2.87B	104.52	11.18%	―	11.77%	45.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Celestica Corporate Events

Celestica Sets Hybrid 2026 Annual Shareholders’ Meeting for May 19

Celestica has scheduled its 2026 Annual Meeting of Shareholders for May 19, 2026, at 9:30 a.m. EDT, to be held in a hybrid format that will be detailed in its forthcoming definitive proxy statement. The company has set March 27, 2026 as the record date to determine shareholders entitled to receive notice of and vote at the meeting, and will again use the notice-and-access method to distribute proxy materials, offering investors online access to documentation and a platform that allows live listening, question submission and real-time voting, underscoring a continued emphasis on accessible, tech-enabled shareholder engagement.

The most recent analyst rating on (TSE:CLS) stock is a Hold with a C$486.00 price target. To see the full list of analyst forecasts on Celestica stock, see the TSE:CLS Stock Forecast page.

Celestica Sets Date and Format for 2026 Annual Shareholders’ Meeting

Celestica Inc. has scheduled its 2026 Annual Meeting of Shareholders for May 19, 2026, at 9:30 a.m. EDT, to be conducted in a hybrid format, with detailed participation instructions to be provided in its forthcoming definitive proxy statement. The company set March 27, 2026, as the record date to determine shareholders entitled to receive notice of and vote at the meeting, and will use a notice-and-access method to distribute proxy materials, which will be available on its website and on Canadian and U.S. securities filing platforms; the online meeting platform will allow shareholders to listen, ask questions and vote in real time, underscoring Celestica’s ongoing adoption of hybrid governance practices and digital shareholder engagement tools.

The most recent analyst rating on (TSE:CLS) stock is a Hold with a C$486.00 price target. To see the full list of analyst forecasts on Celestica stock, see the TSE:CLS Stock Forecast page.

Celestica Lifts 2026 Outlook After Strong AI-Driven Surge in 2025 Results

Celestica reported a strong fourth quarter and full-year 2025, with Q4 revenue rising 44% year-on-year to $3.65 billion and adjusted operating margins and earnings per share improving significantly, driving full-year revenue up 28% to $12.39 billion and more than doubling GAAP EPS. Benefiting from surging demand for AI-related data center technologies and improved visibility into customer roadmaps, the company raised its 2026 outlook to $17.0 billion in revenue and $8.75 in adjusted EPS, plans to lift capital investments to $1 billion in 2026 to support long-term AI infrastructure growth, and expects to fund this expansion organically from operating cash flow, underscoring confidence in sustained momentum into 2027.

The most recent analyst rating on (TSE:CLS) stock is a Buy with a C$400.00 price target. To see the full list of analyst forecasts on Celestica stock, see the TSE:CLS Stock Forecast page.