Celestica Inc. (CLS) reported a robust earnings outlook, with revenues expected to grow to $10.28 billion by 2025 from $7.96 billion in 2023, reflecting a projected growth of 19% this year. The company has seen its stock surge 385% over the past two years, driven by demand from Artificial Intelligence and data center services, particularly within its Connectivity & Cloud Solutions segment, which grew by 51% in Q2 of 2024.
In its latest quarterly results for Q2 2024, Celestica expanded adjusted earnings by 65% and topped earnings estimates by an average of 12% over the trailing four quarters. The enterprise side of its CCS unit reported a 37% increase, attributed to strong demand for AI/Machine Learning compute products. Celestica’s shares are currently trading around $50, about 25% below its average Zacks price target and 45% lower than the broader tech sector.
After growing revenues by 29% in 2022 and 10% in 2023, the company anticipates 9% growth in adjusted earnings for 2025, following a historical average growth of 35% in recent years. Celestica has ranked as a Zacks Rank #1 (Strong Buy), indicating strong momentum in its outlook.
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