Celestica (CLS) AI Stock Analysis

• Market Cap: $21.61B
• Dividend Yield: N/A
• Average Volume (3M): 811.80K
• Price to Earnings (P/E): 37.3
• Beta (1Y): 2.06
• Revenue Growth: 24.94%
• EPS Growth: 42.45%
• Country: CA
• Employees: 21,914
• Sector: Technology
• Sector Strength: 83
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 1.66
• Shares Outstanding: 114,991,980
• 10 Day Avg. Volume: 825,299
• 30 Day Avg. Volume: 811,803
• PEG Ratio: 0.22
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.36
• Enterprise Value/Market Cap: 0.08
• Enterprise Value/Revenue: 0.05
• Enterprise Value/Gross Profit: 1.67
• Enterprise Value/Ebitda: 0.63
• 1Y Price Target: $175.15
• Price Target Upside: -6.81% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 77 Outperform
• Price Target: C$205.00 ▲(9.08%Upside)

Celestica's overall stock score is 77, driven primarily by strong financial performance and a positive outlook from the recent earnings call. The technical analysis supports this view with positive momentum indicators. However, the high valuation and lack of dividend limit the score.

Positive Factors

AI infrastructure investments

Celestica's strong relationships with major hyperscalers position it to benefit from tailwinds relative to AI infrastructure investments and drive strong revenue growth.

High-margin revenue growth

Investments in ODM capabilities are bearing fruit in the form of high growth in high-margin HPS revenues, which have expanded at a 42% CAGR over last 5 years.

Negative Factors

AI/ML program transition

The technology transition in an AI/ML compute program with its largest customer remains on track but is expected to continue to be a year-over-year headwind through the first half of the year.

Celestica Business Overview & Revenue Model

Company Description

Celestica Inc. (CLS) is a Canadian multinational company operating in the electronics manufacturing services (EMS) industry. The company provides a wide range of design, manufacturing, and supply chain solutions to various sectors, including aerospace and defense, healthcare, industrial, semiconductor, and smart energy. Celestica's core services include product lifecycle management, engineering services, and after-market services, helping its customers bring innovative products to market faster and more efficiently.

How the Company Makes Money

Celestica makes money primarily through its electronics manufacturing services, which involve designing, building, testing, and distributing electronic components and assemblies. The company's revenue model is centered around long-term contracts with clients in diverse industries such as aerospace, healthcare, and industrial sectors. Key revenue streams include product manufacturing, supply chain management, and engineering services. Celestica also leverages strategic partnerships with leading technology companies to enhance its service offerings and expand its market reach. By providing end-to-end solutions across the product lifecycle, Celestica helps its clients optimize their operations, reduce costs, and improve time-to-market, which in turn drives the company's earnings.

Celestica Financial Statement Overview

Summary

Celestica's financial statements reflect strong growth and profitability. The income statement shows robust revenue and profit growth, supported by efficient operations. The balance sheet is well-managed with moderate leverage and high returns on equity. Cash flow demonstrates strong cash generation, ensuring financial flexibility.

Income Statement

Celestica's income statement demonstrates robust growth and profitability. The TTM (Trailing-Twelve-Months) Gross Profit Margin is 10.7%, showing a stable ability to generate profit from revenue. The Net Profit Margin for TTM is 4.1%, reflecting consistent profitability. Revenue growth is strong, with a 30.5% increase from 2023 to 2024 and a 21.2% increase from 2022 to 2023, indicating impressive top-line expansion. The EBIT and EBITDA margins are solid at 5.9% and 7.2% respectively for TTM, showcasing efficient operational performance.

Balance Sheet

Celestica's balance sheet reveals a stable financial structure with manageable leverage. The Debt-to-Equity Ratio is 0.61, indicating moderate leverage which is typical for the industry. The Return on Equity (ROE) is strong at 26.5% for TTM, signifying effective use of equity financing to generate profits. The Equity Ratio stands at 26.7%, which shows a reasonable proportion of equity financing compared to total assets. Overall, the company maintains a healthy balance between debt and equity.

Cash Flow

The cash flow statements indicate a strong cash-generating ability. The Free Cash Flow Growth Rate shows a positive trajectory with a 0.96% increase from 2023 to 2024. The Operating Cash Flow to Net Income Ratio for TTM is 1.15, highlighting effective cash generation relative to profit. Furthermore, the Free Cash Flow to Net Income Ratio is 0.74, showing a good conversion of income into cash flow, supporting future investments and financial flexibility.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
10.09B	9.65B	7.96B	7.25B	5.63B	5.75B
	Gross Profit
1.08B	1.03B	778.50M	636.30M	487.00M	437.60M
	EBIT
596.00M	599.30M	383.20M	263.30M	167.70M	127.90M
	EBITDA
728.80M	736.20M	515.70M	408.10M	294.00M	252.60M
	Net Income Common Stockholders
412.50M	428.00M	244.60M	145.50M	103.90M	60.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
303.00M	423.30M	372.60M	374.50M	394.00M	463.80M
	Total Assets
5.83B	5.99B	5.89B	5.63B	4.67B	3.66B
	Total Debt
941.70M	796.70M	782.80M	786.10M	794.40M	585.90M
	Net Debt
638.70M	373.40M	412.40M	411.60M	400.40M	122.10M
	Total Liabilities
4.28B	4.09B	4.12B	3.95B	3.20B	2.26B
	Stockholders Equity
1.56B	1.90B	1.77B	1.68B	1.46B	1.41B
Cash Flow		Free Cash Flow
305.90M	303.00M	304.60M	188.90M	174.60M	186.80M
	Operating Cash Flow
473.10M	473.90M	429.70M	297.90M	226.80M	239.60M
	Investing Cash Flow
-208.80M	-212.50M	-122.40M	-108.90M	-364.30M	-51.00M
	Financing Cash Flow
-269.40M	-208.50M	-311.40M	-208.50M	67.70M	-204.30M

Celestica Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 187.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CLS, the sentiment is Positive. The current price of 187.94 is above the 20-day moving average (MA) of 169.28, above the 50-day MA of 145.74, and above the 200-day MA of 127.44, indicating a bullish trend. The MACD of 9.84 indicates Negative momentum. The RSI at 72.20 is Negative, neither overbought nor oversold. The STOCH value of 87.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CLS.

Celestica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PNG	80 Outperform	C$704.29M	37.22	23.14%	―	4.42%	64.01%
CLS	77 Outperform	$21.61B	37.31	25.87%	―	24.94%	42.45%
ZTE	72 Outperform	$11.05M	8.56	32.72%	―	23.10%	25.40%
Sector *	62 Neutral	$11.91B	9.99	-7.22%	4.96%	7.31%	-8.91%

Celestica Corporate Events

Celestica Surpasses Q1 2025 Expectations and Raises Annual Outlook

Celestica Inc. reported strong financial results for the first quarter of 2025, with revenue reaching $2.65 billion, a 20% increase from the previous year, and adjusted EPS of $1.20, both exceeding the company’s guidance ranges. The company also raised its annual outlook for 2025, expecting revenue to reach $10.85 billion and adjusted EPS to rise to $5.00, reflecting a positive demand outlook from its CCS customers and a record-high adjusted operating margin.