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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on CLS

Negative drivers include valuation concerns, customer concentration, and softness in the ATS segment. The recent earnings release, despite beating estimates, may have already been priced in, potentially limiting upside. Additionally, the company's reliance on strong demand from AI and high revenue growth may not be sustainable, raising caution about future performance.

1.c. Company Highlights

2. Celestica's Strong Q4 2025 Results and 2026 Outlook

Celestica reported strong Q4 2025 results, with revenue of $3.65 billion, up 44% year-over-year, and adjusted EPS of $1.89, exceeding guidance. The company's adjusted operating margin was 7.7%, a record high. For the full year 2025, revenue was $12.4 billion, up 28%, and adjusted EPS was $6.05, up 56%. The actual EPS came out at $2.54 relative to estimates at $2.4. The company expects revenue growth to accelerate in 2026, with a revenue outlook of $17 billion and adjusted EPS outlook of $8.75, representing year-over-year growth of 37% and 45%, respectively.

Publication Date: Feb -15

📋 Highlights
  • Q4 2025 Revenue and EPS Surge: Revenue reached $3.65 billion (+44%), with adjusted EPS at $1.89 (exceeding guidance) and a record 7.7% adjusted operating margin.
  • 2025 Full-Year Outperformance: Revenue hit $12.4 billion (+28%), adjusted EPS rose to $6.05 (+56%), and free cash flow totaled $458 million.
  • 2026 Guidance Set for Strong Growth: Revenue target of $17 billion (+37%) and adjusted EPS of $8.75 (+45%) driven by AI/ML and 1.6T networking demand.
  • $1 Billion CapEx for 2026: Capital spending increased to support hyperscaler programs, with free cash flow guidance of at least $500 million for 2026.
  • CCS Segment and 1.6T Momentum: CCS expected to reach $7 billion by 2027, with 10 active 1.6T programs and margin profiles matching prior switching initiatives.

Growth Drivers and Outlook

The growth is driven by demand in AI, ML, and networking, with 400G, 800G, and 1.6T ramps happening this year. The company is investing $1 billion in CapEx to support growth, with a focus on securing supply and managing risks. Celestica has a strong pipeline of growth opportunities, particularly in its CCS segment, and expects to sustain growth momentum in 2027. The company reported a strong outlook for 2026, with a high-confidence view, and customer forecasts exceeding $17 billion.

Financial Performance and Valuation

Celestica generated $150 million of free cash flow in Q4 2025 and $458 million for the full year. The company's capital expenditures for 2025 were $201 million, or 1.6% of revenue. The company expects to generate at least $500 million of free cash flow this year. With a P/E Ratio of 38.72 and an EV/EBITDA of 26.76, the market is pricing in a certain level of growth. The company's ROIC is 24.16%, indicating a strong return on investment.

Segment Performance and Future Prospects

The growth in enterprise is expected to drive strong profitability, with operating leverage, and no large fixed headwind from growing the enterprise business. CCS is expected to grow close to $7 billion in 2027, with a robust demand outlook. The digital native customer continues to progress, with a meaningful contribution expected in 2027. The company sees increasing activity in multi-rack scale-up XPU networks, such as optical circuit switches and co-packaged optics-based switches, as a major growth driver.

Investment Plans and Customer Relationships

The $1 billion CapEx growth is largely allocated to support programs with existing hyperscalers, with some investment in the digital native customer. The digital native customer relationship is on track, with sample shipments expected in 2026 and a ramp in early 2027. The company has a 1.6T win with a new hyperscaler, which is an extension of its 800G win, and is part of a design-led solution, with the company providing integrated rack systems.

3. NewsRoom

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Jason Phillips Sells 100,000 Shares of Celestica (NYSE:CLS) Stock

Feb -08

Source: defenseworld.net

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Jason Phillips Sells 20,000 Shares of Celestica (NYSE:CLS) Stock

Feb -08

Source: defenseworld.net

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Why Celestica (TSX:CLS) Is Up 9.7% After Hiking Its 2026 AI‑Driven Revenue Outlook – And What's Next

Feb -08

Source:

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Celestica Lifts 2026 Outlook As AI Data Center Demand Builds

Feb -07

Source:

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Top Analyst Reports for AMD, Constellation Energy & Freeport-McMoRan

Feb -06

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Best Momentum Stocks to Buy for February 6th

Feb -06

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Why Celestica is a Massive Winner from Google’s CapEx Bonanza

Feb -06

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Bank of America’s SSI Points to 12% Upside for the S&P 500 – Here Are 2 Stocks to Play the Call

Feb -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.83%)

6. Segments

Connectivity and Cloud Solutions

Expected Growth: 12%

Celestica's Connectivity and Cloud Solutions segment growth is driven by increasing demand for cloud infrastructure, 5G network deployments, and IoT adoption. The company's expertise in designing and manufacturing complex networking equipment, servers, and storage solutions positions it to capitalize on these trends, resulting in 12% growth.

Advanced Technology Solutions

Expected Growth: 14%

Celestica's Advanced Technology Solutions segment growth is driven by increasing demand for 5G infrastructure, cloud computing, and IoT devices. The company's expertise in design, manufacturing, and supply chain management enables it to capitalize on these trends. Additionally, strategic acquisitions and partnerships have expanded its capabilities and customer base, contributing to the 14% growth.

7. Detailed Products

Advanced Technology Solutions

Celestica's Advanced Technology Solutions segment provides design, manufacturing, and supply chain services for complex, high-reliability products such as servers, storage systems, and networking equipment.

Consumer Premises Equipment

Celestica's Consumer Premises Equipment segment provides manufacturing and supply chain services for set-top boxes, digital video recorders, and other consumer electronics.

Enterprise Storage

Celestica's Enterprise Storage segment provides design, manufacturing, and supply chain services for storage systems, hard disk drives, and solid-state drives.

Industrial and Clean Tech

Celestica's Industrial and Clean Tech segment provides manufacturing and supply chain services for industrial automation, renewable energy, and clean technology products.

HealthTech

Celestica's HealthTech segment provides design, manufacturing, and supply chain services for medical devices, diagnostic equipment, and healthcare IT solutions.

Aerospace and Defense

Celestica's Aerospace and Defense segment provides manufacturing and supply chain services for military and aerospace electronics, avionics, and communication systems.

8. Celestica Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Celestica Inc. faces moderate threat from substitutes due to the presence of alternative contract manufacturers in the market.

Bargaining Power Of Customers

Celestica Inc. has a high bargaining power of customers due to the presence of large OEMs that can exert pressure on pricing and terms.

Bargaining Power Of Suppliers

Celestica Inc. has a low bargaining power of suppliers due to its large scale of operations and diversified supplier base.

Threat Of New Entrants

Celestica Inc. faces a low threat of new entrants due to the high barriers to entry in the contract manufacturing industry.

Intensity Of Rivalry

Celestica Inc. operates in a highly competitive industry with intense rivalry among existing players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.68%
Debt Cost 12.27%
Equity Weight 69.32%
Equity Cost 15.70%
WACC 14.65%
Leverage 44.26%

11. Quality Control: Celestica Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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OSI Systems

A-Score: 4.9/10

Value: 2.6

Growth: 5.9

Quality: 7.1

Yield: 0.0

Momentum: 8.5

Volatility: 5.3

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Fabrinet

A-Score: 4.8/10

Value: 0.9

Growth: 8.7

Quality: 6.6

Yield: 0.0

Momentum: 10.0

Volatility: 2.7

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Jabil

A-Score: 4.8/10

Value: 3.5

Growth: 6.6

Quality: 4.4

Yield: 0.0

Momentum: 9.0

Volatility: 5.3

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Vontier

A-Score: 4.6/10

Value: 5.5

Growth: 3.7

Quality: 6.4

Yield: 0.0

Momentum: 5.0

Volatility: 7.3

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Celestica

A-Score: 4.6/10

Value: 1.1

Growth: 8.2

Quality: 6.3

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Badger Meter

A-Score: 4.5/10

Value: 1.2

Growth: 8.0

Quality: 7.2

Yield: 1.0

Momentum: 3.0

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

407.67$

Current Price

407.67$

Potential

-0.00%

Expected Cash-Flows