Why Is Celestica (CLS) Stock Up So Much Today?

Celestica (NYSE:CLS) is an electronics manufacturing services (EMS) company. It also specializes in data centers and AI infrastructure. The stock has been one of the most stellar names on the stock market and delivered 1,300%+ gains since the end of September 2022 to its peak in late January 2025.

However, the DeepSeek spook sent the stock tumbling down nearly 30%. It was one of the hardest-hit stocks last week but has been reversing its losses fast after it reported its Q4 2024 earnings. The stock is now up to around $115, so is it too late to buy, or is there still more room to run? Let’s first take a look at Celestica’s Q4 earnings.

Celestica’s Q4 2024 Earnings Report

Celestica reported solid Q4 earnings and even raised its 2025 outlook due to demand in the data center and AI segments. The top line grew 19% year-over-year to $2.55 billion above consensus estimates. Adjusted EPS came in at $1.11 and also exceeded the high end of guidance and beat FactSet’s $1.04 estimate. GAAP EPS came in at $1.29, up 68% year-over-year.

The Connectivity & Cloud Solutions (CCS) segment saw revenue surge 30% to $1.74 billion and margins improved to 7.9%.

For all of FY2024, revenue grew 21% to $9.65 billion, with adjusted EPS growing 58% to $3.88.

Celestica sees 2025 revenue at $10.7 billion. This is up from its previous guidance of $10.4 billion due to strong demand in its CCS segment from data centers. It sees adjusted EPS at $4.75 next year, which is also up from an earlier guidance of $4.42, and well above FactSet consensus of $4.4.

The Q1 2025 revenue guidance is now at $2.475 billion to $2.625 billion, with adjusted EPS expected at around $1.06 to $1.16. In addition, the FCF guidance was raised by $25 million to $350 million.

The top-line growth here may not seem too great, but management sees production ramps in 2026, so growth will likely pick up more next year.

What Wall Street Thinks About CLS Stock

There is still a lot of optimism around the data center sector due to AI companies doubling down. Analysts have boosted their price targets here, and a $140 price target from BMO was given on Monday.

That said, the consensus price target of $108 still points to downside risk from here. There have been 5 Buy ratings and 1 Hold rating in the past three months.

Should You Buy CLS Stock Now?

Celestica has had a stellar rally over the past two years, and while the fundamentals are still solid, most analysts don’t seem to be confident that Celestica can push much higher. The forward earnings multiple of 21 times already prices in the modest growth. It also has $318 million of net debt.

Regardless, if you believe that data center demand is going to continue surging, it might be worth buying.

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