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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

Celestica's recent momentum is driven by strong quarterly results, AI-focused innovations, and robust supply chain positioning. Analysts have upgraded their forecasts, citing optimism over robust earnings and projected growth, particularly in the communications segment. The company's expanding role in high-value tech infrastructure and rising earnings estimates are key growth drivers. Additionally, insider buying activity and institutional investor interest have supported confidence in Celestica's operational momentum. A recent break above the 50-day moving average and a rebound in share price also signal positive sentiment.

1.c. Company Highlights

2. Celestica's Strong Q3 2025 Earnings: Is the Growth Sustainable?

Celestica reported exceptionally strong Q3 2025 financial results, with revenue reaching $3.19 billion, up 28% year-over-year and above the high end of the guidance range. The non-GAAP operating margin was 7.6%, up 80 basis points, driven by higher margins across both the CCS and ATS segments. Adjusted earnings per share (EPS) for the quarter was $1.58, exceeding the high end of the guidance range and representing a 52% increase year-over-year. The strong performance was largely driven by the CCS segment, with revenue growing 43% to $2.41 billion, fueled by very strong demand in the communications end market, particularly for data center networking switches.

Publication Date: Nov -03

📋 Highlights
  • Q3 Revenue Surge:: Revenue reached $3.19 billion, up 28% YoY, exceeding guidance as CCS segment revenue jumped 43% to $2.41 billion.
  • Adjusted EPS Growth:: Adjusted EPS surged to $1.58, a 52% increase YoY, outperforming guidance and driven by margin expansion and volume gains.
  • 2025 Revenue Outlook Raised:: Full-year revenue guidance lifted to $12.2 billion (up from $11.55B), reflecting 26% YoY growth and strong CCS demand.
  • CCS Communications Growth:: Communications end-market revenue in CCS is projected to hit $7 billion in 2025 (78% growth), led by 800G switch programs.
  • HPS Portfolio Expansion:: HPS portfolio to generate $5 billion in 2025 (80% growth), with R&D spend increasing by >50% in 2025 and 2026 to support custom AI/ML compute solutions.

Segment Performance

The CCS segment's revenue growth was driven by the ramp-up of 800G switch programs across Celestica's largest hyperscaler customers. In contrast, the ATS segment's revenue declined by 4% to $781 million, slightly lower than the guidance of a low single-digit percentage decline. Despite this, the company's adjusted gross margin improved to 11.7%, up 100 basis points, driven by higher volumes and improved mix in both segments.

Guidance and Outlook

Celestica provided guidance for Q4 2025, with revenue projected to be between $3.325 billion and $3.575 billion, representing growth of 36% at the midpoint. Adjusted EPS is anticipated to be between $1.65 and $1.81, representing an increase of $0.62 at the midpoint or 56%. The company also raised its 2025 revenue outlook to $12.2 billion, up from $11.55 billion previously, reflecting year-over-year growth of 26%. Analysts estimate next year's revenue growth at 31.9%, indicating a continued strong trajectory.

Valuation Metrics

To understand what's priced into Celestica's stock, we can examine its valuation metrics. The company has a P/E Ratio of 56.59, P/B Ratio of 19.53, and P/S Ratio of 3.51. The EV/EBITDA ratio is 40.39, indicating a relatively high valuation. The ROE is 38.68%, and ROIC is 24.14%, suggesting strong profitability. With a strong growth outlook and solid financial performance, the question remains whether the current valuation is justified.

3. NewsRoom

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SANM's Robust Portfolio Fueling Revenues: Will the Trend Persist?

Dec -04

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Jim Cramer Notes That “The Gemini 3 Improvement Was Very Good News for Google”

Dec -04

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3 Stocks Poised to Benefit From Google’s AI Breakthough

Dec -03

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SANM Skyrockets 92.5% in a Year: Should You Buy the Stock?

Dec -03

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Zacks Investment Ideas feature highlights: Robinhood Markets, Celestica and and Nvidia

Dec -03

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Here’s What Boosted Celestica (CLS) in Q3

Dec -03

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2 Top-Ranked Tech Stocks to Buy in December: HOOD, CLS

Dec -02

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Analysts Retain Bullishness For Celestica Inc (CLS)

Dec -01

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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

Stock-Card
Vontier

A-Score: 5.0/10

Value: 4.9

Growth: 3.8

Quality: 6.3

Yield: 0.0

Momentum: 7.5

Volatility: 7.3

1-Year Total Return ->

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Jabil

A-Score: 4.9/10

Value: 3.5

Growth: 6.7

Quality: 4.6

Yield: 0.0

Momentum: 9.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
OSI Systems

A-Score: 4.8/10

Value: 2.6

Growth: 5.9

Quality: 6.1

Yield: 0.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

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Fabrinet

A-Score: 4.7/10

Value: 0.9

Growth: 8.7

Quality: 6.4

Yield: 0.0

Momentum: 9.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Celestica

A-Score: 4.6/10

Value: 1.1

Growth: 8.2

Quality: 5.6

Yield: 0.0

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Badger Meter

A-Score: 4.5/10

Value: 1.4

Growth: 8.0

Quality: 7.6

Yield: 1.0

Momentum: 2.0

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

450.09$

Current Price

450.09$

Potential

-0.00%

Expected Cash-Flows