- Celestica Inc. (CLS, Financial) posts outstanding Q1 2025 earnings, exceeding revenue and EPS forecasts.
- Company raises full-year revenue and EPS outlook amid strong hyperscaler demand.
- Analysts project a significant upside from the current stock price, maintaining an "Outperform" rating.
Celestica Inc. (CLS) delivered remarkable first-quarter 2025 results, achieving revenues of $2.65 billion and an adjusted EPS of $1.20. These figures not only surpassed the company's top guidance range but also underscored the robust demand driving growth, particularly from hyperscalers influencing both HPS networking switches and capital equipment segments.
Financial Performance Highlights
The company experienced a 20% increase in revenue year-over-year, propelled by high demand from hyperscalers. Key financial metrics displayed significant improvement, with adjusted gross margins increasing to 11.0% and adjusted return on invested capital rising to 31.5%. Furthermore, Celestica generated $94 million in free cash flow while executing $115 million in share repurchases year-to-date, demonstrating effective capital management.
2025 Outlook and Guidance
For the full year of 2025, Celestica has revised its revenue forecast upwards to $10.85 billion, reflecting a 12% growth rate. Additionally, the company has increased its adjusted EPS target to $5.00. Expectations for Q2 2025 revenue range from $2.575 billion to $2.725 billion, with adjusted EPS anticipated between $1.17 and $1.27, continuing the positive momentum observed in Q1.
Analyst Forecast and Valuation
According to projections from 12 analysts, the average price target for Celestica Inc. (CLS, Financial) is set at $124.19, with estimates ranging from a high of $157.00 to a low of $95.00. This average target indicates a potential upside of 38.30% from the current stock price of $89.80. For more comprehensive estimates, visit the Celestica Inc (CLS) Forecast page.
Additionally, based on assessments from 14 brokerage firms, Celestica Inc.'s (CLS, Financial) average brokerage recommendation is positioned at 1.9, categorizing it as an "Outperform." The rating system considers 1 as a Strong Buy and 5 as a Sell.
In terms of valuation, the estimated GF Value for Celestica Inc. (CLS, Financial) in one year is $32.21, indicating a potential downside of 64.13% from the current trading price of $89.80. GF Value is GuruFocus's method for estimating the fair value of a stock, taking into account historical multiples, past business growth, and future business performance projections. Further details are available on the Celestica Inc (CLS) Summary page.
