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Celestica's 25% slide since my previous update contrasts with accelerating earnings and repeated increases to management's full-year financial targets. August's $3 billion equity offering rattled shareholders, but I view its funding for critical components as supportive of future growth. Beyond 800G switches, expanding 1.6T programs, OpenAI accelerator racks, and AMD networking partnerships could broaden Celestica's earnings opportunities through 2027.

Celestica (CLS - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Over the past month, shares of this electronics manufacturing services company have returned -15.8%, compared to the Zacks S&P 500 composite's +0.7% change. During this period, the Zacks Electronics - Manufacturing Services industry, which Celestica falls in, has lost 9.1%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

Celestica is expected to post earnings of $3.01 per share for the current quarter, representing a year-over-year change of +90.5%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The consensus earnings estimate of $11.32 for the current fiscal year indicates a year-over-year change of +87.1%. This estimate has remained unchanged over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $19.01 indicates a change of +67.9% from what Celestica is expected to report a year ago. Over the past month, the estimate has remained unchanged.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Celestica.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Celestica, the consensus sales estimate for the current quarter of $5.4 billion indicates a year-over-year change of +69.1%. For the current and next fiscal years, $20.35 billion and $31.99 billion estimates indicate +64.3% and +57.2% changes, respectively.

Last Reported Results and Surprise HistoryCelestica reported revenues of $4.7 billion in the last reported quarter, representing a year-over-year change of +62.4%. EPS of $2.54 for the same period compares with $1.39 a year ago.

Compared to the Zacks Consensus Estimate of $4.35 billion, the reported revenues represent a surprise of +8.08%. The EPS surprise was +10.92%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Celestica is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Celestica. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Celestica (CLS - Free Report) closed the most recent trading day at $300.35, moving -1.14% from the previous trading session. This change lagged the S&P 500's 0.41% gain on the day. Meanwhile, the Dow lost 0.07%, and the Nasdaq, a tech-heavy index, added 1.11%.

Prior to today's trading, shares of the electronics manufacturing services company had lost 8.66% lagged the Computer and Technology sector's loss of 0.92% and the S&P 500's gain of 1.46%.

The upcoming earnings release of Celestica will be of great interest to investors. The company's earnings report is expected on October 26, 2026. The company's earnings per share (EPS) are projected to be $3.01, reflecting a 90.51% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $5.4 billion, reflecting a 69.1% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $11.32 per share and a revenue of $20.35 billion, demonstrating changes of +87.11% and +64.27%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Celestica. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Celestica is currently a Zacks Rank #3 (Hold).

Investors should also note Celestica's current valuation metrics, including its Forward P/E ratio of 26.83. This represents a premium compared to its industry average Forward P/E of 22.9.

The Electronics - Manufacturing Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 17, which puts it in the top 7% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Celestica (CLS - Free Report) .

Celestica currently has an average brokerage recommendation (ABR) of 1.15, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 20 brokerage firms. An ABR of 1.15 approximates between Strong Buy and Buy.

Of the 20 recommendations that derive the current ABR, 18 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 90% and 5% of all recommendations.

Brokerage Recommendation Trends for CLS

Check price target & stock forecast for Celestica here>>>

While the ABR calls for buying Celestica, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.

In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Is CLS a Good Investment?Looking at the earnings estimate revisions for Celestica, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $11.32.

Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Celestica. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Celestica.

Celestica (CLS - Free Report) closed at $347.50 in the latest trading session, marking a -4.05% move from the prior day. The stock's change was less than the S&P 500's daily loss of 0.06%. Elsewhere, the Dow gained 0.38%, while the tech-heavy Nasdaq lost 0.44%.

Shares of the electronics manufacturing services company have appreciated by 4.5% over the course of the past month, underperforming the Computer and Technology sector's gain of 4.85%, and outperforming the S&P 500's gain of 2.36%.

The upcoming earnings release of Celestica will be of great interest to investors. The company's earnings report is expected on October 26, 2026. The company's earnings per share (EPS) are projected to be $3.01, reflecting a 90.51% increase from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $5.4 billion, showing a 69.1% escalation compared to the year-ago quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $11.32 per share and a revenue of $20.35 billion, indicating changes of +87.11% and +64.27%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Celestica. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Celestica currently has a Zacks Rank of #3 (Hold).

In the context of valuation, Celestica is at present trading with a Forward P/E ratio of 31.98. This represents a premium compared to its industry average Forward P/E of 26.08.

The Electronics - Manufacturing Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 17, placing it within the top 7% of over 250 industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

Investment ThesisThis recent pullback in Celestica Inc. (NYSE:CLS) stock, caused by a massive $3B Secondary Public Offering (SPO) — which involved a significant discount on the shares offered –, gave investors an attractive entry point to buy this promising asset. Market focus on the dilution of shareholders’ equity is a short-term issue, but in the long term, it remains relevant to continue strengthening the company’s moat.

Now, looking at the rapid expansion of the CCS segment, with record revenue and an operating margin of 8.7%, it’s clear that Celestica’s leadership continues to strengthen. And that allows the company to continue its transition to becoming an AI infrastructure systems integrator. Moreover, significant PEG discount and revenue growth while maintaining the EV/Sales multiple suggest a potential 65% increase in the company’s value over the next 12–18 months.

Growth in the CCS Segment Strengthens Celestica’s MoatCelestica’s strategy is centered on transforming its previous business model, which saw the Connectivity & Cloud Solutions (CCS) and Advanced Technology Solutions (ATS) segments account for approximately 60% and 40% of revenue, respectively. Starting in 2023, with the onset of the AI supercycle, that ratio began to shift in favor of the CCS segment, which is a sign of the parabolic growth in demand for server equipment.

In Q1 2023, according to the data, revenue in the ATS segment totaled $792M, compared to $1.045B in the CCS segment. Still, over time, the electronics segment is becoming less significant relative to networking equipment, necessary for data center operators, cloud providers, and hyperscalers. According to data for Q2 2026, revenues from the ATS segment increased only to $888M, whereas the CCS segment reached a record $3.81B. Moreover, compared to the operating margin figures by segment, we should note the clear advantage of CCS over ATS (8.7% vs. 6.3%, as of Q2 2026).

I believe that the focus on the CCS segment will continue to grow, since network equipment manufacturing supports the operation of cloud applications and AI models. Within its product portfolio, Celestica is also expanding its offerings in the high-speed network switches and data storage systems subsegments. These moves help strengthen Celestica’s competitive moat, because they enable the company to offer increasingly comprehensive services to customers, which are tailored to their individual needs.

However, there is a fly in the ointment: Celestica is facing increasing competition from diversified Asian players that offer similar service portfolios. They include Foxconn, the leader in the AI server segment (working closely with Nvidia), along with the Taiwanese giant Quanta Computer, working with hyperscalers such as Microsoft, Alphabet, and Meta Platforms. Therefore, one of Celestica’s strategic moves is to seek new partners among these giants, enabling it to bring new, meaningful products to market.

The most significant example is the new partnership with AMD (announced on March 16, 2026), enabling the launch of the Helios AI platform, a computing solution that uses the entire rack as its basic unit (volume production is expected in early 2027). Further implementation of the plans listed above should help Celestica strengthen its role as a provider of full-rack solutions. Apart from AMD, the management announced during the most recent conference call a partnership with OpenAI (OPENAI), which the company plans to begin supplying with specialized racks.

The Phenomenon of Repeated Forecast Upward Revisions for 2026–2027Celestica recorded another increase in revenue in Q2 2026 (+62% YoY), achieving $4.7B. The adjusted operating margin for the year rose from 7.4% to 8.2%. In light of strengthening customer demand and the partial resolution of previous component supply issues, management increased its previous full-year revenue forecast for 2026 from $19.0B to $20.5B, along with an adjusted operating margin forecast from 8.1% to 8.4%. In addition, ongoing implementation of new projects (most notably in collaboration with AMD and OpenAI) will drive revenue growth in 2027 as well.

Consensus forecasts from analysts predict that annual revenue growth in 2027 will be 72.4% (revenue growth of 65.94% is expected in 2026), increasing the figure to $35.45B. Even though this growth will slow down starting in 2028, revenue is projected to reach $70.55B by 2030.

A Large-Scale SPO Worth $3B: Necessity or Mistake?Looking at the reasons behind CLS’s decline in value over the past quarter, one thing worth mentioning right away is the large-scale SPO announced on August 5, 2026. The quarterly report indicates that the number of shares outstanding at the end of Q2 2026 was 115.0M. Within the framework of the $3B SPO, a further 9.677M common shares were issued at a price of $310. One day before the offering, at the market close, share price stood at $362.76, then dropped to $314.53 the following day. The significant decline in market capitalization was due to a discount of more than 14% in the pricing of the recently issued shares relative to the market value at the time of the SPO.

Considering that the number of shares outstanding automatically increased from 115.0M to 124.677M, share dilution amounted to 8.41%. Moreover, in the context of this SPO, Celestica additionally granted the underwriters an option to purchase 1.451M common shares. Thus, share dilution could potentially increase to 9.68%.

Certainly, the terms of the SPO represented a steep discount to the current value of CLS shares, resulting in bearish pressure. This significant dilution of shareholders’ equity in a single transaction caused a wave of profit-taking among institutional investors, which led to a sharp price correction. But the negative impact of this news ends there, plus it’s already old news that won’t increase selling pressure, neither in the short term nor in the long term.

However, analyzing the reasons behind this transaction, its great importance for maintaining the business’ previous growth rate should be highlighted. The management of Celestica has confirmed the need to raise additional funds ($536M as of Q2 2026), the proceeds of which will be used to finance CapEx (spending is projected to rise to $1B in 2026) and replenish working capital. Given that customer demand is showing parabolic growth, the company’s operational capabilities must be scaled up through investments in fixed assets. Doing so will enable Celestica to realize its corporate goals of consolidating its leadership in the server equipment market. The reasons for raising these funds also include the realization of new projects with AMD and OpenAI.

CLS ValuationTo analyze the attractiveness of CLS stock, let’s take a look at the forward PEG, EV/Sales, and EV/EBITDA ratios relative to other competitors: Jabil Inc. (JBL), Flex Ltd. (FLEX), Sanmina Corporation (SANM), and Plexus Corp. (PLXS).

These are the average multiples: 0.78x, 1.26x, and 15.00x. As a result, CLS is trading at a 21.8% discount based on Non-GAAP PEG (FWD), whereas based on EV/Sales (FWD) and EV/EBITDA (FWD), their shares are trading at premiums of 62.7% and 47.3%, respectively.

But when lumping CLS together with its competitors listed above, we should keep in mind the fundamental difference between the companies themselves. This is because virtually all of its competitors trade at lower multiples but lack the competitive moat that CLS possesses. With regard to Celestica, the company is a market leader and is expanding its roster of strategic partners. In addition, its comprehensive suite of services for organizing AI clusters in the CCS segment is also expanding.

Based on the results for 2027, revenue is expected to grow to $35.45B, which I believe will keep the EV/Sales multiple around 2.00x as operating margins continue to rise. Thus, using this multiple on the projected revenue, the projected valuation of the business is estimated to grow from the current $43B to $71B. Based on current stock prices, that implies a 65.1% upside potential over the next 12–18 months.

According to Wall Street estimates, analyst consensus forecasts indicate an average price target of $473.91, suggesting a 27.02% increase. Out of 22 Wall Street analysts, everyone has a positive rating on the stock (17 at “Strong Buy” and 5 at “Buy”). Recently, for example, the analysts at UBS revised their neutral rating, increasing it from “Hold” to “Buy” with a target price of $430. Their main reason for the revision is an upward revision of forecasts for the CCS segment, showing that Celestica’s management strategy to increase the share of full-rack solutions is on the right track.

Supply Chain Disruption RisksLike before, I think that potential supply chain disruptions remain the main risk for Celestica. Company management also mentioned this during their latest conference call. These disruptions could lead to delays in the delivery of certain components needed to build complete solutions. One negative consequence of this could be the deferral of revenue to subsequent quarters, resulting in volatility in financial metrics in future quarterly reports.

But this risk was already known based on the results of Q1 2026. The result was that revenue exceeded forecasts, but operating margins, actually, improved. The main reason for this is Celestica’s partnership model with its customers, which shifts most of the costs onto the customers themselves. These factors reduce pricing risks and help maintain the positive trend of growing operating margins. As a result, whereas last time I would have rated this risk at 6 out of 10, now I am lowering its significance to 4.

ConclusionThus, CLS’s recent correction is temporary, because the company maintains strong fundamental momentum, which allows us to reaffirm its “Buy” rating. The $3B raised will be used to scale Celestica’s operational capabilities, helping it solidify its position as a market leader. Its plans with AMD and the new partnership with OpenAI provide an opportunity to increase sales in the CCS segment, with a record operating margin of 8.7%. Based on my valuation of CLS shares, I forecast a 65% upside potential for the company’s value, in line with the high valuations from Wall Street.

Analyst’s Disclosure: I have a beneficial long position in the shares of CLS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

CLS is riding AI infrastructure and 800G/1.6T networking demand, but customer concentration and competition pose risks to its growth.

On October 07, 2026, Celestica Inc CLS shares fell 4.3% to a current price of $371.57. The stock has had a volatile year, with a 52-week range between $230.24 and $474.03, reflecting significant fluctuations in market sentiment.

GF Value™ verdict: Celestica is currently trading at $371.57, which is 90.2% above the GF Value™ estimate of $195.39, indicating that the stock is significantly overvalued.GF Score™: With a score of 84/100, CLS is rated as "Strong," reflecting solid financial performance and growth potential.Notable signal: Insider activity has shown significant net selling, with $252.0 million in shares sold over the past 12 months, suggesting a cautious outlook from insiders.Is CLS Overvalued or Undervalued?The current trading price of Celestica Inc at $371.57 is significantly above its GF Value™ estimate of $195.39, indicating a substantial overvaluation of 90.2%. GF Value™ represents GuruFocus' proprietary estimate of intrinsic value based on historical trading multiples, past growth, and future performance projections. Given that the stock is trading well above this intrinsic value, it raises concerns regarding its margin of safety for potential investors.

This overvaluation signals a heightened risk for investors, as the gap between the current price and intrinsic value suggests that market expectations may not be justified by the company's fundamentals. Should the market correct this disparity, investors could face losses if the stock price declines to align more closely with its intrinsic value. The GF Valuation label indicates that CLS is currently in a "Significantly Overvalued" state, reinforcing this cautionary stance.

How Does CLS's Valuation Compare to Its History?MetricCurrentHistoricalP/E (TTM)38.6x17.7xForward P/E18.9xN/ACelestica's current P/E ratio of 38.6x is a staggering 118% higher than its 5-year median P/E of 17.7x. This stark contrast indicates that the stock is trading at a premium compared to its historical valuation metrics, which aligns with the GF Value™ verdict of being overvalued. The forward P/E of 18.9x suggests that analysts expect some improvement in earnings, but even this figure reflects a valuation that is higher than historical trends.

What Does CLS's GF Score™ Tell Us?The GF Score™ is a composite score that measures the overall attractiveness of a stock based on several key factors, including financial strength, profitability, growth, valuation, and momentum. Celestica's GF Score™ of 84/100 suggests it has strong fundamentals, particularly in growth and profitability, but struggles in valuation.

MetricRatingGF Score™84/100Financial Strength7/10Profitability9/10Growth10/10Valuation1/10Momentum8/10The strengths in CLS's score are particularly pronounced in the growth (10/10) and profitability (9/10) categories, indicating robust operational performance and effective management. However, the valuation rank of 1/10 highlights significant concerns regarding the stock's current price in relation to its fundamentals. This contrast suggests that while the company is performing well operationally, its stock price may not reflect this reality, exacerbating the risk for prospective investors.

What Are Gurus and Insiders Doing with CLS?Currently, 7 gurus hold positions in Celestica Inc, with 2 adding to their stakes while 8 have trimmed their positions in recent quarters. This activity indicates a mixed sentiment among institutional investors, suggesting that while some see potential, others are becoming cautious.

In terms of insider activity, over the past 12 months, insiders have bought $2.1 million worth of shares but have sold a substantial $254.1 million, resulting in a net selling of $252.0 million. This net selling could imply a lack of confidence in the stock's future performance among those who are most familiar with the company's operations. Such patterns warrant attention as they can signal potential issues in the company's outlook, contributing to the overall bearish sentiment reflected in the stock's high valuation.

What This Means for InvestorsIn conclusion, based on the GF Value™ assessment, Celestica Inc is significantly overvalued at its current price of $371.57 compared to the GF Value™ estimate of $195.39. The disparity between the market price and intrinsic value, coupled with concerning insider selling and high historical P/E ratios, presents a cautious outlook for potential investors. For more detailed insights, you can visit the Celestica Inc CLS stock page, as well as explore the GF Value™ page for further valuation metrics.

Frequently Asked QuestionsWhat is CLS's GF Score™?

CLS has a GF Score™ of 84/100, indicating strong fundamentals with particularly high marks in growth and profitability.

Is CLS overvalued or undervalued?

According to the GF Value™ verdict, CLS is significantly overvalued, with a current price that is 90.2% above its intrinsic value estimate.

What is CLS's P/E ratio?

The P/E ratio for CLS is currently 38.6x, which is 118% above its 5-year median of 17.7x, indicating a significant premium compared to its historical valuation metrics.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Disclosures I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.

Kopin (NASDAQ:KOPN – Get Free Report) and Celestica (NYSE:CLS – Get Free Report) are both technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Profitability This table compares Kopin and Celestica’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets Kopin 18.26% 14.79% 8.42% Celestica 7.16% 39.96% 11.06% Risk & Volatility Kopin has a beta of 3.59, indicating that its stock price is 259% more volatile than the S&P 500. Comparatively, Celestica has a beta of 2.01, indicating that its stock price is 101% more volatile than the S&P 500.

Analyst Ratings This is a breakdown of current ratings and target prices for Kopin and Celestica, as reported by MarketBeat. Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Kopin 1 1 6 0 2.62 Celestica 0 1 23 0 2.96 Kopin presently has a consensus price target of $7.17, suggesting a potential upside of 47.16%. Celestica has a consensus price target of $450.50, suggesting a potential upside of 17.78%. Given Kopin’s higher possible upside, equities research analysts clearly believe Kopin is more favorable than Celestica.

Valuation & Earnings This table compares Kopin and Celestica”s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Kopin $39.32 million 23.02 $2.61 million $0.04 121.75 Celestica $15.59 billion 2.82 $832.50 million $9.62 39.76 Celestica has higher revenue and earnings than Kopin. Celestica is trading at a lower price-to-earnings ratio than Kopin, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership 31.0% of Kopin shares are owned by institutional investors. Comparatively, 67.4% of Celestica shares are owned by institutional investors. 2.6% of Kopin shares are owned by company insiders. Comparatively, 1.1% of Celestica shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary Celestica beats Kopin on 8 of the 14 factors compared between the two stocks.

About Kopin (Get Free Report)

Kopin Corporation, together with its subsidiaries, invents, develops, manufactures, and sells microdisplays, subassemblies, and related components for defense, enterprise, industrial, and consumer products in the United States, the Asia-Pacific, Europe, and internationally. It offers miniature active-matrix liquid crystal displays, liquid crystal on silicon displays/spatial light modulators, organic light emitting diode displays, microLED display technologies, application specific integrated circuits, backlights, and optical lenses; and head-mounted and hand-held VR products. The company’s products are used for soldier thermal weapon rifle sights, avionic fixed and rotary wing pilot helmets, armored vehicle targeting systems, and training and simulation headsets; industrial and medical headsets; 3D optical inspection systems; and consumer augmented reality and virtual reality wearable headsets systems. Kopin Corporation was incorporated in 1984 and is headquartered in Westborough, Massachusetts.

About Celestica (Get Free Report)

Celestica Inc. provides 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, new product introduction, engineering services, 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 hardware platform solutions, which includes development of infrastructure platforms, and hardware and software design solutions and services which is used as-is or customized for specific applications; and management of program including design and supply chain, manufacturing, and after-market support, including IT asset disposition and asset management services. The company offers its products and services to original equipment manufacturers, cloud-based, and other service providers, including hyperscalers, and other companies in aerospace and defense, industrial, HealthTech, capital equipment, and communication and enterprise markets. Celestica Inc. was incorporated in 1994 and is headquartered in Toronto, Canada.

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Ferguson Wellman Capital Management Inc. bought a new stake in Celestica, Inc. (NYSE:CLS – Free Report) (TSE:CLS) during the third quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund bought 76,975 shares of the technology company’s stock, valued at approximately $27,821,000. Ferguson Wellman Capital Management Inc. owned about 0.07% of Celestica as of its most recent SEC filing.

Other institutional investors and hedge funds have also recently modified their holdings of the company. Renaissance Technologies LLC purchased a new stake in Celestica in the 1st quarter worth about $68,952,000. K.J. Harrison & Partners Inc purchased a new stake in Celestica during the second quarter valued at about $1,092,000. Quantinno Capital Management LP lifted its holdings in Celestica by 73.7% during the first quarter. Quantinno Capital Management LP now owns 23,954 shares of the technology company’s stock valued at $6,746,000 after purchasing an additional 10,164 shares during the last quarter. Ninepoint Partners LP bought a new position in Celestica during the second quarter worth about $2,880,000. Finally, The Manufacturers Life Insurance Company increased its stake in shares of Celestica by 1.9% in the first quarter. The Manufacturers Life Insurance Company now owns 959,586 shares of the technology company’s stock worth $270,416,000 after purchasing an additional 18,105 shares in the last quarter. 67.38% of the stock is owned by institutional investors.

Insider Activity at Celestica In related news, President Todd Cooper sold 20,118 shares of Celestica stock in a transaction on Wednesday, September 23rd. The shares were sold at an average price of $360.00, for a total value of $7,242,480.00. Following the transaction, the president owned 73,252 shares in the company, valued at $26,370,720. This trade represents a 21.55% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Robert Mionis sold 98,453 shares of Celestica stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $368.99, for a total value of $36,328,172.47. The SEC filing for this sale provides additional information. In the last 90 days, insiders have sold 243,067 shares of company stock valued at $89,200,967. Insiders own 1.10% of the company’s stock.

Analyst Upgrades and Downgrades CLS has been the topic of a number of recent research reports. UBS Group upgraded shares of Celestica from a “neutral” rating to a “buy” rating and upped their price target for the company from $410.00 to $430.00 in a research note on Monday, August 24th. Wolfe Research lifted their price objective on shares of Celestica from $425.00 to $475.00 and gave the company an “outperform” rating in a research note on Wednesday, July 29th. JPMorgan Chase & Co. raised their price target on Celestica from $445.00 to $485.00 and gave the stock an “overweight” rating in a report on Wednesday, July 29th. Bank of America reiterated a “buy” rating on shares of Celestica in a research note on Wednesday, July 29th. Finally, Weiss Ratings cut shares of Celestica from a “buy (b)” rating to a “buy (b-)” rating in a research note on Thursday, August 13th. Twenty-three research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $450.50. Get Our Latest Stock Report on Celestica

Celestica Price Performance CLS traded down $2.12 during trading on Monday, reaching $385.19. The stock had a trading volume of 653,625 shares, compared to its average volume of 2,420,680. The business has a 50-day moving average of $330.45 and a 200-day moving average of $345.99. Celestica, Inc. has a one year low of $230.24 and a one year high of $474.02. The company has a debt-to-equity ratio of 0.32, a quick ratio of 0.68 and a current ratio of 1.23. The stock has a market cap of $44.29 billion, a PE ratio of 40.02 and a beta of 2.01.

Celestica (NYSE:CLS – Get Free Report) (TSE:CLS) last posted its quarterly earnings data on Monday, July 27th. The technology company reported $2.54 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.29 by $0.25. The firm had revenue of $4.68 billion during the quarter, compared to analysts’ expectations of $4.30 billion. Celestica had a return on equity of 39.96% and a net margin of 7.16%.The company’s revenue for the quarter was up 62.4% compared to the same quarter last year. During the same period in the prior year, the business earned $1.39 EPS. Celestica has set its FY 2026 guidance at 11.300-11.300 EPS and its Q3 2026 guidance at 2.880-3.080 EPS. As a group, equities research analysts anticipate that Celestica, Inc. will post 10.71 EPS for the current fiscal year.

About Celestica (Free Report)

Celestica Inc (NYSE: CLS) is a global provider of design, manufacturing, and supply-chain services for original equipment manufacturers and other technology companies. The company helps customers develop, produce, deploy, and support complex hardware and electronic systems, serving industries such as communications, enterprise technology, aerospace and defense, industrial technology, health care, and semiconductor equipment.

Its services include product design and engineering, printed circuit board and systems assembly, manufacturing, testing, logistics, aftermarket support, and supply-chain management.

Further Reading Five stocks we like better than Celestica A Manufacturing Surprise Could Be a Big Win for These 2 Companies What a $1 Billion Chip Deal Says About Amazon’s AI Ambitions 3 Stocks Benefiting From AI Demand Just Announced Major Buybacks Insiders Are Selling These 3 Stocks, Should You? Want to see what other hedge funds are holding CLS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Celestica, Inc. (NYSE:CLS – Free Report) (TSE:CLS).

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In the latest trading session, Celestica (CLS - Free Report) closed at $365.88, marking a +2.62% move from the previous day. The stock exceeded the S&P 500, which registered a loss of 0.17% for the day. On the other hand, the Dow registered a loss of 0.26%, and the technology-centric Nasdaq decreased by 0.09%.

Heading into today, shares of the electronics manufacturing services company had gained 19.08% over the past month, outpacing the Computer and Technology sector's gain of 3.58% and the S&P 500's loss of 0.24%.

The investment community will be paying close attention to the earnings performance of Celestica in its upcoming release. The company's earnings per share (EPS) are projected to be $3.01, reflecting a 90.51% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $5.4 billion, indicating a 69.1% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $11.32 per share and a revenue of $20.35 billion, representing changes of +87.11% and +64.27%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Celestica. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. At present, Celestica boasts a Zacks Rank of #3 (Hold).

In terms of valuation, Celestica is presently being traded at a Forward P/E ratio of 31.48. Its industry sports an average Forward P/E of 24.79, so one might conclude that Celestica is trading at a premium comparatively.

The Electronics - Manufacturing Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 19, finds itself in the top 8% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

Celestica (CLS - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Shares of this electronics manufacturing services company have returned +22.3% over the past month versus the Zacks S&P 500 composite's +1% change. The Zacks Electronics - Manufacturing Services industry, to which Celestica belongs, has gained 11.9% over this period. Now the key question is: Where could the stock be headed in the near term?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Celestica is expected to post earnings of $3.01 per share for the current quarter, representing a year-over-year change of +90.5%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

For the current fiscal year, the consensus earnings estimate of $11.32 points to a change of +87.1% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $19.01 indicates a change of +67.9% from what Celestica is expected to report a year ago. Over the past month, the estimate has remained unchanged.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Celestica is rated Zacks Rank #1 (Strong Buy).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

In the case of Celestica, the consensus sales estimate of $5.4 billion for the current quarter points to a year-over-year change of +69.1%. The $20.35 billion and $31.99 billion estimates for the current and next fiscal years indicate changes of +64.3% and +57.2%, respectively.

Last Reported Results and Surprise HistoryCelestica reported revenues of $4.7 billion in the last reported quarter, representing a year-over-year change of +62.4%. EPS of $2.54 for the same period compares with $1.39 a year ago.

Compared to the Zacks Consensus Estimate of $4.35 billion, the reported revenues represent a surprise of +8.08%. The EPS surprise was +10.92%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Celestica is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Celestica. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.

Celestica, Inc. (NYSE:CLS – Get Free Report) (TSE:CLS) CEO Robert Mionis sold 23,396 shares of the firm’s stock in a transaction dated Wednesday, September 23rd. The stock was sold at an average price of $364.22, for a total transaction of $8,521,291.12. The transaction was disclosed in a document filed with the SEC, which is accessible through this link.

Robert Mionis also recently made the following trade(s):

On Thursday, August 13th, Robert Mionis sold 23,496 shares of Celestica stock. The shares were sold at an average price of $362.39, for a total transaction of $8,514,715.44. On Tuesday, August 4th, Robert Mionis sold 98,453 shares of Celestica stock. The shares were sold at an average price of $368.99, for a total transaction of $36,328,172.47. On Wednesday, August 5th, Robert Mionis sold 51,061 shares of Celestica stock. The stock was sold at an average price of $368.41, for a total transaction of $18,811,383.01. On Friday, July 31st, Robert Mionis sold 9,543 shares of Celestica stock. The shares were sold at an average price of $367.49, for a total transaction of $3,506,957.07. Celestica Trading Down 2.2% CLS opened at $365.24 on Friday. The stock has a market capitalization of $42.00 billion, a PE ratio of 37.97 and a beta of 2.04. Celestica, Inc. has a one year low of $230.24 and a one year high of $474.02. The company has a debt-to-equity ratio of 0.32, a quick ratio of 0.68 and a current ratio of 1.23. The business’s 50 day moving average price is $326.00 and its 200 day moving average price is $341.87.

Celestica (NYSE:CLS – Get Free Report) (TSE:CLS) last posted its earnings results on Monday, July 27th. The technology company reported $2.54 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.29 by $0.25. Celestica had a return on equity of 39.96% and a net margin of 7.16%.The company had revenue of $4.68 billion during the quarter, compared to analysts’ expectations of $4.30 billion. During the same quarter last year, the firm earned $1.39 earnings per share. The firm’s quarterly revenue was up 62.4% compared to the same quarter last year. Celestica has set its FY 2026 guidance at 11.300-11.300 EPS and its Q3 2026 guidance at 2.880-3.080 EPS. As a group, equities research analysts expect that Celestica, Inc. will post 10.71 EPS for the current year. Wall Street Analysts Forecast Growth A number of brokerages have weighed in on CLS. Wolfe Research lifted their price target on shares of Celestica from $425.00 to $475.00 and gave the company an “outperform” rating in a research report on Wednesday, July 29th. TD set a $430.00 target price on shares of Celestica and gave the company a “buy” rating in a report on Wednesday, September 16th. Bank of America restated a “buy” rating on shares of Celestica in a research note on Wednesday, July 29th. Wall Street Zen cut Celestica from a “buy” rating to a “hold” rating in a research note on Sunday, September 6th. Finally, Stifel Nicolaus set a $500.00 target price on Celestica in a report on Tuesday, July 28th. One equities research analyst has rated the stock with a Strong Buy rating and twenty-two have given a Buy rating to the company’s stock. According to MarketBeat, the stock has a consensus rating of “Buy” and a consensus price target of $447.19.

View Our Latest Stock Analysis on Celestica

Institutional Investors Weigh In On Celestica Hedge funds have recently bought and sold shares of the stock. Washington Trust Advisors Inc. acquired a new stake in Celestica in the second quarter valued at approximately $28,000. Sittner & Nelson LLC purchased a new stake in shares of Celestica in the 4th quarter valued at approximately $31,000. Ascentis Independent Advisors purchased a new stake in shares of Celestica in the 1st quarter valued at approximately $29,000. Harbor Investment Advisory LLC acquired a new stake in shares of Celestica in the 2nd quarter valued at $58,000. Finally, Continuum Advisory LLC acquired a new stake in shares of Celestica in the 2nd quarter valued at $62,000. Institutional investors and hedge funds own 67.38% of the company’s stock.

Celestica Company Profile (Get Free Report)

Celestica Inc (NYSE: CLS) is a global provider of design, manufacturing, and supply chain solutions for technology companies and other businesses. The company helps customers develop, manufacture, and support complex electronic products and systems, offering services that span product design and engineering, prototyping, printed circuit board assembly, systems integration, testing, supply chain management, and after-market support.

Celestica serves customers across several markets, including communications and cloud infrastructure, aerospace and defense, industrial technology, health technology, and capital equipment.

Further Reading Five stocks we like better than Celestica Costco Ends Its Fiscal Year on a High Note, Eyes Big Expansion Cracker Barrel Stock Is Rallying Again, But the Turnaround Still Has a Traffic Problem Oracle’s Force Majeure Notice Exposes a Bigger Problem for the AI Build-Out Oil May Be Stronger Than It Looks—And Diamondback Is on Sale

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SummaryCelestica enters 2027 with ten 1.6T programs, continued 800G growth, and AMD Helios and OpenAI rack production approaching.Management expects 2027 revenue growth to exceed 2026’s 65%, supported by multibillion-dollar AI programs and long-term capacity commitments.My base case assumes $31 billion revenue and $16 adjusted EPS, supporting a $450 target and approximately 24% upside.Capital intensity remains the key risk, with $1 billion in 2026 CapEx and an August equity issuance increasing shares by nearly 10%. akinbostanci/E+ via Getty Images

I still stay bullish on Celestica (CLS) since the opportunity has evolved to be more than the networking theme, which was the foundation of my thesis. The 2027 setup has multiple real catalysts, including ramping up

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of CLS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Key Takeaways CareDx, Ciena, Celestica, Materion and MACOM passed the high-efficiency stock screen.The screen required efficiency ratios above industry averages and a Zacks Rank #1.CareDx posted an 85.7% average four-quarter earnings surprise, highest among the five. Efficiency measures how effectively a company utilizes its resources and inputs to generate productive outputs. It is an important indicator of a company’s ability to generate profits, as higher efficiency typically reflects better resource utilization, stronger operational performance and more effective management of costs and assets. Companies that operate efficiently can often maximize output from their available resources, improve productivity and strengthen overall profitability. Hence, companies with high efficiency levels are expected to deliver stronger returns, as efficiency is often positively correlated with stock price performance.

However, at times, it becomes difficult to measure the efficiency level of a company. This is why one must consider popular efficiency ratios while selecting stocks.

CareDx (CDNA - Free Report) , Ciena (CIEN - Free Report) , Celestica (CLS - Free Report) , Materion (MTRN - Free Report) and MACOM Technology Solutions (MTSI - Free Report) made it through the screening process.

The efficiency ratios are:

Receivables Turnover: This is the ratio of 12-month sales to four-quarter average receivables. It shows a company’s potential to extend its credit and collect debt in terms of that credit. A high receivables turnover ratio, or the “accounts receivable turnover ratio” or “debtor’s turnover ratio” is desirable as it shows that the company is capable of collecting its accounts receivable or that it has quality customers.

Asset Utilization: This ratio indicates a company’s capability to convert assets into output and is thus a widely known measure of efficiency level. It is calculated by dividing total sales over the past 12 months by the last four-quarter average of total assets. Like the above ratios, high asset utilization may indicate that a company is efficient.

Inventory Turnover: The ratio of the 12-month cost of goods sold (COGS) to a four-quarter average inventory is considered one of the most popular efficiency ratios. It indicates a company’s ability to maintain a suitable inventory position. While a high value indicates that the company has a relatively low inventory level compared to COGS, a low value indicates that the company is facing declining sales, which has resulted in excess inventory.

Operating Margin: This efficiency measure is the ratio of operating income over the past 12 months to sales over the same period. It measures a company’s ability to control operating expenses. Hence, a high value of the ratio may indicate that the company manages its operating expenses more efficiently than its peers.

Screening CriteriaIn addition to the above-mentioned ratios, we have added a favorable Zacks Rank — Zacks Rank #1 (Strong Buy) — to the screen to make this strategy more profitable. You can see the complete list of today’s Zacks #1 Rank stocks here.

Inventory Turnover, Receivables Turnover, Asset Utilization, and Operating Margin greater than the industry average(Values of these ratios higher than industry averages may indicate that the efficiency level of the company is higher than its peers.)   

The use of these few criteria has narrowed down the universe of over 7,906 stocks to 23.

Our ChoicesHere are the top five stocks that made it through the screen:

CareDx

CareDx is a commercial-stage company that develops, markets and delivers a diagnostic surveillance solution for heart transplant recipients. CDNA has an average four-quarter earnings surprise of 85.7%.

CIEN

CIEN is a leading provider of optical networking equipment, software and services. CIEN has an average four-quarter earnings surprise of 17.6%.

Celestica

Celestica is one of the largest electronics manufacturing services companies in the world, primarily serving original equipment manufacturers, cloud-based and other service providers and enterprises from several industries. CLS has an average four-quarter earnings surprise of 7.7%.

Materion

Materion is engaged in the production and supply of high-performance engineered materials in the United States and internationally. MTRN has an average four-quarter earnings surprise of 6.6%.

MACOM Technology Solutions

MACOM Technology Solutions is a provider of power analog semiconductor solutions to varied markets. MTSI has an average four-quarter earnings surprise of 2.6%.

Agentic inference is intensifying AI networking demand, expanding Celestica Inc.'s content share across the growing AI infrastructure TAM through scale-out, scale-up, and system-level opportunities. The AMD Helios and OpenAI Jalapeno deal wins validate Celestica's deepening reach into next-generation AI architectures, underscoring an inflection from scale-out towards scale-up connectivity that requires 10x greater interconnect density. The upcoming 1.6T ramp also catalyzes an increasing mix shift for CLS towards higher-value HPS sales, reinforcing incremental operating leverage supportive of further earnings and FCF expansion at scale.

Key Takeaways Celestica provides manufacturing, engineering and supply chain solutions to medical device companies.CLS' HealthTech portfolio spans imaging systems, surgical equipment, diabetes care and diagnostic products.CLS supports medical products from initial development through manufacturing and ongoing after-market support. Celestica Inc. (CLS - Free Report) plays a key role in the healthcare technology sector by providing advanced manufacturing, engineering and supply chain solutions to medical device companies. Its expertise in diagnostics, surgical technologies, patient monitoring and other healthcare applications helps customers bring sophisticated medical products to market.

Celestica’s HealthTech manufacturing portfolio includes medical imaging systems, surgical equipment, diabetes-care devices, in-vitro diagnostic instruments and connected medical products. It provides services such as design and development, precision manufacturing, systems integration and after-market support, helping customers improve product quality, reduce costs and meet regulatory requirements.

The company also uses its global manufacturing footprint and supply chain capabilities to manage complex production needs, improving efficiency, enhancing reliability and supporting the production of highly regulated medical devices. Celestica works with healthcare and medical technology companies across the product lifecycle, from initial development through large-scale manufacturing and ongoing support.

As adoption of digital health solutions, smart medical devices, surgical robotics and advanced diagnostic equipment continues to increase, Celestica is well positioned to benefit from the expanding HealthTech market.

How Are Competitors Advancing in the HealthTech Market?Celestica faces competition from Jabil, Inc. (JBL - Free Report) and Sanmina Corporation (SANM - Free Report) . Jabil has a broad HealthTech business that supports the development and manufacturing of medical devices and healthcare products. The company is focusing on areas such as connected health, diagnostics, medical equipment and drug-delivery technologies. Jabil’s manufacturing and supply-chain capabilities are helping healthcare companies bring new products to market more efficiently.

Sanmina has a strong presence in HealthTech, providing specialized solutions for medical device manufacturers. Its capabilities span areas such as cardiovascular care, robotic surgery and patient monitoring. Sanmina combines engineering, manufacturing and supply-chain services to support the development and production of medical technologies.

Celestica's Price Performance, Valuation & EstimatesCelestica shares have soared 39.1% over the past year compared with the industry’s growth of 50.1%.

Image Source: Zacks Investment Research

From a valuation standpoint, Celestica trades at a forward price-to-earnings ratio of 20.71, up from the industry average of 19.66.

Image Source: Zacks Investment Research

Earnings estimates for 2026 have increased 11.4% to $11.32 per share over the past 60 days, while the same for 2027 has increased 30.2% to $19.01.

Image Source: Zacks Investment Research

Celestica currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 | Source: Celestica International LP

Mandeep Chawla named to newly created role of Group President, Global Markets;
Todd Ankenmann appointed to Chief Financial Officer

TORONTO, Sept. 11, 2026 (GLOBE NEWSWIRE) -- Celestica Inc. (NYSE, TSX: CLS), a global leader in data center infrastructure and advanced technology solutions, today announced executive leadership appointments to align with the company’s strong growth trajectory and position the business for sustainable, multi-year growth. Effective October 1, 2026, Mandeep Chawla will assume the newly created role of Group President, Global Markets, and Todd Ankenmann will succeed him as Chief Financial Officer (CFO).

In the new role of Group President, Global Markets, Chawla will oversee the company's overarching commercial execution and global market expansion. This structure is designed to drive operational velocity, scale the business effectively and capture accelerating demand across Celestica’s end markets.

Chawla has served as Celestica's CFO since 2017, playing a critical role in driving the company's financial health, strategic transformation, and long-term performance. Prior to joining Celestica in 2010, Chawla spent nearly a decade at General Electric (GE), followed by senior leadership roles across the engineering and life sciences sectors.

“Celestica is experiencing unprecedented growth, and as we look to the future, we are evolving our leadership structure to ensure we can scale effectively and continue delivering exceptional value to our customers and shareholders,” said Rob Mionis, Chairman and Chief Executive Officer, Celestica. “Mandeep has been an outstanding CFO and a core contributor to our strategic vision. His deep understanding of our business, combined with his exceptional commercial acumen, makes him the ideal leader to step into this crucial new role to drive our next chapter of growth.”

Succeeding Chawla as CFO is Todd Ankenmann, who brings a wealth of institutional knowledge and financial expertise to the executive team. Ankenmann joined Celestica in 2018 and currently serves as Senior Vice President, Finance, where he plays a pivotal role in strategic planning, financial reporting, and commercial execution. Before joining Celestica, Ankenmann spent over a decade in senior finance leadership roles at GE.

“With his deep understanding of our business model, rigorous financial management, and proven track record across our ATS and CCS businesses, Todd is uniquely positioned for a seamless transition to Chief Financial Officer,” said Mionis. “Together, these appointments optimize our executive team to deliver on our long-term growth objectives.”

About Celestica
Celestica is a technology leader dedicated to driving customer success and market advancements. With deep expertise in design, engineering, manufacturing, supply chain, and platform solutions, Celestica enables critical data center infrastructure for AI, cloud and hybrid cloud, and advances technologies in high-growth markets. With a talented team and a strategic global network, Celestica helps its customers achieve competitive advantages. For more information on Celestica, visit www.celestica.com. Our securities filings can be accessed at www.sedarplus.ca and www.sec.gov.

Cautionary Note Regarding Forward-Looking Statements
Statements in this press release relating to Celestica’s future plans, expectations, beliefs, and intentions are “forward-looking statements” and are subject to material risks, uncertainties, and assumptions. Those statements may include statements related to strong growth trajectory and sustainable, multi-year growth, and expected benefits of leadership appointments, including driving operational velocity, scaling the business effectively and capturing accelerating demand across end markets, all of which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, and Canadian securities laws. Forward-looking statements are commonly identified by words such as “would,” “may,” “expects,” “believes,” “designed to” “intends,” “position for” and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this press release are based on current beliefs, assumptions and expectations, speak only as of the date of this press release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Such statements are subject to certain known and unknown risks and uncertainties, many of which are difficult to predict and are generally beyond Celestica’s control, that could cause actual results and other future events to differ materially from those expressed in, or implied or projected by, the forward-looking information. Investors are urged to review in detail the risks, uncertainties, and assumptions contained in Celestica’s Securities and Exchange Commission (SEC) filings, including Celestica’s most recent reports on Form 10-K, Form 10-Q, Current Reports on Form 8-K and other documents filed with, or furnished to, the SEC, and the Canadian Securities Administrators. These filings are available on the SEC’s website, and www.sedarplus.ca or on Celestica’s website at https://corporate.celestica.com/sec-filings. Celestica undertakes no duty to update any statement in light of new information or future events or otherwise, except as expressly required by applicable law.

Celestica Contacts:
Celestica Global Communications
(416) 448-2200
[email protected]

Celestica Investor Relations
[email protected]

Celestica raised 2026 guidance to $20.5 billion revenue and $11.30 EPS, while Q3 growth approaches 69% YoY. Component lead times exceeding 52 weeks are driving binding commitments and giving CLS demand visibility through 2028 and 2029. Ten 1.6T programs, CPO, AMD Helios and OpenAI Jalapeño create overlapping AI infrastructure ramps extending well beyond 2026.

Key Takeaways Celestica sees strong AI infrastructure demand, with Enterprise revenue rising 167% in Q2 2026.CLS expects 1.6T programs with two hyperscalers to enter mass production in Q3 2026.Celestica's operating cash flow rose to $410.9 million, while free cash flow climbed 22.7%. Earnings estimates for Celestica Inc. (CLS - Free Report) for fiscal 2026 and fiscal 2027 have moved up 11.42% to $11.32 and 30.21% to $19.01, respectively, over the past 60 days. The positive estimate revision depicts bullish sentiments about the stock’s growth potential.

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CLS Gains from AI Infrastructure Demand, Portfolio StrengthThe proliferation of AI-based applications is expanding demand for Celestica's data communications and information processing infrastructure. In the second quarter of 2026, Enterprise revenues rose 167%, driven by the accelerated ramp of a hyperscaler AI/ML compute program, while 800G switching continued to scale. The company expects mass production of 1.6T programs with two hyperscalers to begin in the third quarter of 2026, with 10 active programs expected to ramp through 2027.

The company will manufacture advanced AI racks developed in collaboration with Broadcom to support OpenAI's custom accelerator roadmap. Initial deliveries are expected later in 2026, with mass production scheduled for 2027.

AMD is broadening its AI infrastructure offerings with the planned Helios platform. Celestica is playing an important role as a design and manufacturing partner for the platform.

Celestica’s comprehensive portfolio spanning communications, cloud, aerospace and defense, industrial and healthcare markets strengthens its business model by making it less vulnerable to downturn in any single market. Its strong focus on product diversification and high-value markets is supported by R&D, engineering and advanced manufacturing capabilities. This allows the company to maintain its competitive edge in a highly competitive electronics manufacturing services industry where it faces competition from major players such as Jabil, Inc. (JBL - Free Report) , Sanmina Corporation (SANM - Free Report) and Flex.

Healthy Cash Flow and Strong Balance Sheet are PositivesCash provided by operating activities increased to $410.9 million from $152.4 million in the year-ago quarter, supported by stronger earnings despite higher working capital requirements tied to rapid growth. Free cash flow was $147.1 million, up 22.7% year over year.

As of the second quarter of 2026, Celestica’s current ratio stands at 1.23. A current ratio more than 1 implies that the company is well positioned to pay off its short-term debt obligations.

Price PerformanceCelestica shares have declined 1% in the past year against the Electronics - Manufacturing Services industry’s growth of 20.3%. The stock has underperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.

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The company has underperformed its peers like Jabil and Sanmina. Shares of Jabil have jumped 31.2%, and shares of Sanmina have risen 24.9%.

Key Valuation Metric of CLSFrom a valuation standpoint, CLS is currently trading at a discount compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 17.75 forward 12-month earnings, lower than 18.08 for the industry.

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End NoteCLS is witnessing solid momentum across several end markets backed by its robust portfolio. Growing investments in AI infrastructure are driving expansion of Celestica's AI compute business. CLS expects AI-related demand to remain a significant contributor to growth in the coming quarter. The company’s strong liquidity better positions it to navigate economic downturns and capitalize on emerging growth opportunities. Celestica’s expanding client base and growing collaboration with tech giants such as Broadcom, AMD and OpenAI bring a multi-billion-dollar revenue-generating opportunity in the next several years. Hence, with a Zacks Rank #1 (Strong Buy), Celestica appears to be a good investment option at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Let's take a look at what these Wall Street heavyweights have to say about Celestica (CLS - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Celestica currently has an average brokerage recommendation (ABR) of 1.05, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 19 brokerage firms. An ABR of 1.05 approximates between Strong Buy and Buy.

Of the 19 recommendations that derive the current ABR, 18 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 94.7% and 5.3% of all recommendations.

Brokerage Recommendation Trends for CLS

Check price target & stock forecast for Celestica here>>>

While the ABR calls for buying Celestica, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Should You Invest in CLS?Looking at the earnings estimate revisions for Celestica, the Zacks Consensus Estimate for the current year has increased 3.3% over the past month to $11.32.

Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Celestica. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, the Buy-equivalent ABR for Celestica may serve as a useful guide for investors.

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

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What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.

Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.8% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

That's where the Style Scores come in.

To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Celestica (CLS - Free Report) Headquartered in Ontario, Canada, Celestica is one of the largest electronics manufacturing services companies in the world, primarily serving original equipment manufacturers, cloud-based and other service providers and enterprises from several industries. The company offers a comprehensive range of manufacturing and supply-chain solutions related to design and development, new product introduction, engineering services, component sourcing, electronics manufacturing and assembly, testing, systems integration, logistics, product licensing, after-market repair, return and information technology (IT) asset management and disposition services. Celestica's extensive depth and breadth of offerings support a wide variety of customer requirements, from low-volume, high-complexity custom products to high-volume commodity products.

CLS is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. CLS has a Growth Style Score of A, forecasting year-over-year earnings growth of 80.2% for the current fiscal year.

Three analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.74 to $10.90 per share. CLS also boasts an average earnings surprise of +7.7%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CLS should be on investors' short list.

Celestica delivered 62% revenue growth and 83% adjusted EPS growth, supported by strong AI infrastructure demand and expanding operating leverage. The Communications and Cloud Solutions segment generated 81% of sales, with server and storage revenue increasing 167% year-over-year during the quarter. Adjusted EBITDA margins expanded 80 basis points as higher volumes, improved product mix, and high-margin AI programs strengthened profitability operations.

Key Takeaways Sandisk leads with a 56.5% net profit margin and 200.9% expected earnings growth. Celestica has a 7.2% net profit margin and an 80.2% expected earnings growth rate.BrightSpring's 2.6% net profit margin accompanies an expected earnings growth rate of 82%. The artificial intelligence (AI) boom and upbeat corporate earnings have driven the broader S&P 500 close to record highs in August, with strong momentum expected to continue into September. Banking on this optimism, investors should focus on companies that consistently generate strong profits after accounting for both operating and non-operating expenses. 

Such companies are generally better positioned to benefit from favorable market conditions than those reporting losses. To evaluate a company’s profitability, investors often use profitability ratios, which help measure its ability to generate consistent and sustainable earnings. 

On that note, Sandisk Corporation (SNDK - Free Report) , Celestica Inc. (CLS - Free Report) and BrightSpring Health Services, Inc. (BTSG - Free Report) stand out as the most profitable stocks, supported by strong net income ratios and upside potential.    

Importance of Net Income Ratio for Investors The net income ratio is a key indicator of a company’s overall profitability. It reflects the percentage of net income relative to total sales revenues. Using the net income ratio, one can assess a firm’s ability to cover operating and non-operating expenses with revenues. A higher net income ratio usually implies a company’s ability to generate sufficient revenue and manage all business functions effectively.

Stock Screening Parameters Used in Research Wizard The net income ratio is not the only indicator of future winners. So, we have added a few more criteria to arrive at a winning strategy.

Zacks Rank equal to #1: Whether the market is good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Trailing 12-Month Sales and Net Income Growth Higher than X Industry: Stocks that have witnessed higher-than-industry sales and net income growth in the past 12 months are positioned to perform well.

Trailing 12-Month Net Income Ratio Higher than X Industry: A high net income ratio indicates a company’s solid profitability.

Percentage Rating Strong Buy greater than 70: This indicates that 70% of the current broker recommendations for the stock are Strong Buy. 

These few parameters have narrowed the universe of more than 7,685 stocks to only 17. 

Here are three of the 17 stocks that qualified for the screening:

Sandisk Sandisk develops and sells NAND flash-based data storage devices and solutions worldwide. SNDK’s 12-month net profit margin is 56.5%. Sandisk’s expected earnings growth rate for the current year is 200.9% (read more: Everyone's Watching NVIDIA - But Is Sandisk the Real AI Winner?). 

Celestica Celestica and its subsidiaries provide supply-chain solutions across Asia, North America, and global markets. Celestica’s 12-month net profit margin is 7.2%. Celestica’s expected earnings growth rate for the current year is 80.2%. 

BrightSpring Health Services BrightSpring Health Services provides home and community-based healthcare services across the United States. BTSG’s 12-month net profit margin is 2.6%. BTSG’s expected earnings growth rate for the current year is 82%. 

Key Takeaways FLEX's CPI revenue rose 35%, fueled by strong power growth as cloud and cooling programs ramp.CLS saw CCS revenue surge 84%, driven by 800G networking and accelerating AI/ML compute demand.CLS raised its 2026 revenue outlook to $20.5 billion as new AI infrastructure programs gain momentum. Flex Ltd. (FLEX - Free Report) and Celestica, Inc. (CLS - Free Report) are both benefiting from the accelerating demand for AI infrastructure, with strong opportunities across networking, data centers and AI compute. Flex is seeing solid growth across its Cloud and Power Infrastructure (CPI), communications and industrial businesses, while Celestica is benefiting from rising demand for AI/ML compute and next-generation networking programs.

Both companies are positioning themselves to benefit from continued AI infrastructure investments, but their growth opportunities differ. Flex is expanding its exposure to AI infrastructure through advanced networking, power and cooling solutions, while Celestica is seeing strong momentum from 800G and 1.6T networking programs and multiple AI compute ramps.

Let’s analyze their fundamentals, growth opportunities, market challenges and valuation to assess which one presents a stronger investment opportunity.

The Case for FLEXFlex’s CPI business is becoming an increasingly important growth engine as AI infrastructure spending accelerates. In the first quarter of fiscal 2027, total revenue rose 21% year over year to $7.9 billion. CPI revenue grew 35% to $2.2 billion, driven by strong power growth as cloud and cooling programs continued to ramp. Communications and industrial businesses also delivered solid growth, supported by high-value markets such as advanced networking, automation and energy infrastructure.

Flex is also positioned to benefit from the broader, long-term build-out of AI infrastructure, as demand increasingly extends beyond computing to power, cooling and electrical systems. The company is seeing sustained demand in advanced networking, including high-speed switching, optical products and interface technologies, while also gaining share in some product segments. Communications is expected to remain one of Flex’s largest and healthiest businesses, supported by data center demand. Meanwhile, energy infrastructure is benefiting from data center and utility-scale investments, while regionalization, labor shortages and productivity requirements support robotics and warehouse automation.

For the second quarter of fiscal 2027, FLEX expects revenues of $7.95-$8.25 billion. Management expects Regulated Manufacturing Solutions revenues to rise in the mid-single to high-single digits. Integrated Technology Solutions is projected to grow in the high-single to low-double digits, while Cloud and Power Infrastructure is expected to increase 45-55%. Flex raised its fiscal 2027 revenue guidance to $33.7-$35.2 billion from $32.3-$33.8 billion.

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Flex is further expanding its capabilities across power, cooling and compute integration to address increasingly complex AI infrastructure requirements. The company is engaging with hyperscaler customers on next-generation silicon, power and cooling, while its partnership with Cerebras spans manufacturing, cooling and future power opportunities. Its JetCool acquisition has added cold plate capabilities, and Flex is qualifying coolant distribution units with customers. The company is also expanding modular power capacity in Dallas and Iowa to support rising demand.

However, Flex continues to face near-term pressure from investments required to support its rapid CPI expansion. New programs typically require upfront investment before reaching maturity, while the power business is seeing somewhat muted margins as Flex invests to support growth of more than 70%. Although the company expects at least 100 basis points of year-over-year CPI margin improvement, the segment’s growth is back-half loaded and depends on successfully ramping new capacity. In addition, first-quarter free cash flow was $41 million after $24 million of one-time spin-off-related cash costs, while fiscal 2027 free cash flow conversion is now expected at approximately 40% compared with the previously projected 60%.

The Case for CLSCelestica is benefiting from strong and accelerating demand for AI infrastructure, with its Communications and Cloud Solutions (CCS) segment emerging as a major growth driver. In the second quarter of 2026, revenue increased 62% year over year to $4.7 billion, while adjusted EPS rose 83% to $2.54. CCS revenue surged 84%, supported by strong growth across communications and enterprise markets. Communications revenue increased 62%, driven by 800G networking switch programs and continued demand for 400G programs, while enterprise revenue jumped 167% as an AI/ML compute program with a hyperscaler accelerated.

The company is also seeing strong momentum from next-generation networking and AI compute programs. Celestica expects continued growth in 800G networking, alongside the start of mass production for its first 1.6T programs. The company has 10 active 1.6T programs, which are expected to gain momentum in 2027, while the pipeline continues to expand. In addition, the company expects multiple AI compute programs to ramp, supporting continued growth in its enterprise business.

Celestica is further strengthening its position in AI infrastructure through new custom rack opportunities. The company expects to begin initial deliveries of custom racks for OpenAI later in 2026 and will work with OpenAI and Broadcom on multigenerational custom accelerator road maps, with mass production of the Jalapeño accelerator planned for 2027. Celestica also sees its AMD Helios opportunity as a multibillion-dollar pipeline, with samples expected toward the end of 2026 and the ramp beginning in the first half of 2027.

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Celestica’s outlook has strengthened as customer demand and program visibility continue to improve. The company raised its 2026 revenue outlook to $20.5 billion, implying 65% growth, and increased its adjusted EPS outlook to $11.30, up 87%. Management expects revenue growth to accelerate further in 2027, supported by strong customer demand, new program wins, continued 800G growth, accelerating 1.6T ramps and multiple AI compute programs. The company also expects operating margin expansion as CCS becomes a larger part of the business and benefits from higher utilization and operating leverage.

However, Celestica continues to face supply-chain constraints as demand for AI data center infrastructure exceeds global component supply. On the last earnings call, management highlighted that materials remain the primary constraint, despite having sufficient capacity plans for 2026 and 2027.

FLEX vs. CLS Share Price PerformanceOver the past six months, FLEX shares have gained 83.1%, while Celestica jumped 6.2%.

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Valuation for FLEX & CLSIn terms of Price/Book, FLEX shares are trading at 8.08X, below CLS’ 14.4X.

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How Do Estimates Compare for FLEX & CLS?Analysts have revised their earnings estimates upward for FLEX’s bottom line for the current year.

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For CLS, there have been upward revisions for the current year.

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FLEX or CLS: Which Stock to Bet On?While CLS sports a Zacks Rank #1 (Strong Buy) at present, FLEX has a Zacks Rank #3 (Hold). Consequently, in terms of Zacks Rank, CLS seems to be a better pick at the moment.

You can see the complete list of today’s Zacks #1 Rank stocks here.