Celestica (CLS) AI Stock Analysis

• Market Cap: C$31.87B
• Dividend Yield: N/A
• Average Volume (3M): 833.47K
• Price to Earnings (P/E): 43.2
• Beta (1Y): 2.29
• Revenue Growth: 24.07%
• EPS Growth: 61.63%
• Country: CA
• Employees: 21,914
• Sector: Technology
• Sector Strength: 98
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 1.92
• Shares Outstanding: 115,032,684
• 10 Day Avg. Volume: 1,067,031
• 30 Day Avg. Volume: 833,469
• 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: 0.06
• Enterprise Value/Revenue: 0.05
• Enterprise Value/Gross Profit: 1.67
• Enterprise Value/Ebitda: 0.63
• 1Y Price Target: C$302.81
• Price Target Upside: 9.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 75 Outperform
• Price Target: C$313.00 ▲(12.99%Upside)

Celestica's high overall score is driven by strong financial performance and a positive earnings call. The robust growth in the CCS segment and increased annual outlook support future success. However, valuation concerns and overbought technical indicators are notable risks.

Positive Factors

Customer Relationships

Celestica has benefited from the ramp in AI-related spending in the data center switch market as two of the top-five cloud SPs (Google and Amazon) were the company’s largest customers and accounted for ~40% of sales.

Financial Performance

Celestica's revenue and earnings per share have significantly surpassed consensus estimates, which reflects the company's strong financial performance.

Market Position

Celestica holds a market-leading position in the 400G/800G sectors and is expected to sustain this position with advancements like 1.6T, along with its exposure to AI, indicating strong potential for future growth.

Negative Factors

Customer Dependence

Downside risks include loss of a program with either of Celestica’s two top customers or lower gross margins due to competitive pressures.

Technology 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 multinational electronics manufacturing services (EMS) company based in Canada. It operates in various sectors including aerospace and defense, communications, enterprise, healthtech, industrial, and smart energy. Celestica provides a range of services from design and engineering to manufacturing, supply chain management, and after-market services, helping its customers bring their products to market efficiently and effectively.

How the Company Makes Money

Celestica generates revenue primarily through its electronics manufacturing services, which include the design, assembly, and testing of electronic components and systems. The company's key revenue streams involve long-term contracts with original equipment manufacturers (OEMs) across different industries, providing comprehensive solutions that cover the entire product lifecycle. Celestica also benefits from its strategic partnerships and collaborations with leading technology firms, enhancing its service offerings and expanding its market reach. Additionally, the company's supply chain management and after-market services contribute to its earnings by offering value-added solutions that improve operational efficiencies for its clients.

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
EBITDA	728.80M	736.20M	515.70M	408.10M	294.00M	252.60M
Net Income	412.50M	428.00M	244.60M	145.50M	103.90M	60.60M
Balance Sheet
Total Assets	5.83B	5.99B	5.89B	5.63B	4.67B	3.66B
Cash, Cash Equivalents and Short-Term Investments	303.00M	423.30M	372.60M	374.50M	394.00M	463.80M
Total Debt	941.70M	796.70M	782.80M	786.10M	794.40M	585.90M
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: 277.01
• 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 277.01 is above the 20-day moving average (MA) of 230.01, above the 50-day MA of 199.61, and above the 200-day MA of 149.69, indicating a bullish trend. The MACD of 18.98 indicates Negative momentum. The RSI at 78.10 is Negative, neither overbought nor oversold. The STOCH value of 82.64 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
CLS	75 Outperform	C$31.87B	43.20	30.28%	―	24.07%	61.63%
ZTE	72 Outperform	C$10.69M	7.75	32.72%	―	23.10%	25.40%
PNG	71 Outperform	C$1.04B	46.53	23.14%	―	4.42%	64.01%
Sector *	62 Neutral	$35.05B	6.90	-11.57%	2.06%	6.28%	-15.90%

Celestica Corporate Events

Celestica Surpasses Q2 2025 Expectations and Raises Annual Outlook

Celestica reported strong financial results for Q2 2025, with revenue reaching $2.89 billion, a 21% increase from the previous year, and adjusted EPS of $1.39, a 54% rise. The company exceeded its guidance ranges and has raised its 2025 annual outlook, expecting revenue to hit $11.55 billion and adjusted EPS to reach $5.50. This performance reflects robust demand from CCS customers and improved operating margins, positioning Celestica favorably in the market.

The most recent analyst rating on (TSE:CLS) stock is a Buy with a C$150.00 price target. To see the full list of analyst forecasts on Celestica stock, see the TSE:CLS Stock Forecast page.