Core Industry Insights - The electronics manufacturing services (EMS) industry is highly competitive and rapidly evolving, driven by factors such as AI, data center expansion, consumer electronics growth, 5G adoption, IoT proliferation, and automotive innovation [4] - Both Celestica Inc. and Jabil Inc. are strategically positioned in this evolving EMS landscape, with domain-specific expertise in core areas [4] Jabil Inc. Highlights - Jabil is experiencing significant growth in AI-related revenues, projected to reach $8.5 billion by 2025, reflecting a 50% year-over-year growth [5] - The AI data center market is expected to grow from $15.02 billion in 2024 to $93.60 billion in 2032, with a compound annual growth rate of 26.8% [6] - Jabil plans to invest $500 million in the Southeast U.S. to expand manufacturing capabilities and workforce development for the cloud and AI data center infrastructure market [6] - The company generated $326 million in adjusted free cash flow in Q3 and anticipates over $1.2 billion in adjusted free cash flow for the full year 2025, indicating efficient working capital management [7] - Jabil faces challenges from weak demand in renewable energy and EV verticals, as well as competition from Celestica and others [8] Celestica Inc. Highlights - Celestica is witnessing growth in its Connectivity & Cloud Solutions (CCS) segment, driven by strong demand for 400G and 800G switches [9][10] - The company is focusing on product diversification and innovation, with strategic collaborations with industry leaders like AMD and Broadcom expected to yield long-term benefits [10] - Celestica's strong R&D capabilities allow it to produce high-volume electronic products and complex technology infrastructure products [11] - The introduction of innovative products, such as the ES1500 enterprise access switch, positions Celestica for long-term growth [12] - However, the company faces margin pressures due to intensifying competition and significant customer concentration risk [13] Financial Performance and Valuation - Jabil's 2025 sales are estimated to grow by 0.58%, with EPS growth of 10.13%, while Celestica's sales and EPS are expected to grow by 13.15% and 30.15%, respectively [14][16] - Over the past year, Celestica's stock has gained 152.6%, while Jabil's has increased by 85.2% [17] - Jabil's shares trade at a forward P/E ratio of 20.42, which is lower than Celestica's 28.98, making Jabil more attractive from a valuation standpoint [17] Investment Outlook - Jabil holds a Zacks Rank 1 (Strong Buy), while Celestica has a Zacks Rank 3 (Hold), indicating a stronger investment outlook for Jabil [19][21] - Both companies are expected to benefit from the growing AI proliferation across industries, but Jabil's broader portfolio, robust cash flow, and strategic investments provide it with a competitive edge [21]

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Group 1 - Celestica Inc. will hold its second quarter 2025 financial results conference call on July 29, 2025, at 8:00am ET [1] - The financial results will be released after market close on July 28, 2025 [1] - A live webcast will be available for participants to join [1] Group 2 - For those unable to attend the live call, a recorded webcast will be accessible approximately two hours after the call [2] - The recorded webcast can be accessed via Celestica's official website [2] - Contact information for Celestica Investor Relations is provided for further inquiries [2]

Core Points - CLS Holdings USA, Inc. announced a reverse stock split of one post-Consolidation Share for every 4,000,000 pre-Consolidation Shares, approved by 94.27% of Stockholders [1] - The effective date of the Consolidation is set for July 11, 2025, following unanimous approval from the Board of Directors [2] - Stockholders will receive a cash payment of $0.037 per pre-Consolidation Share for any fractional shares resulting from the Consolidation [3] - CLS has applied for voluntary delisting from the Canadian Securities Exchange, with the delisting expected to occur on the same date as the effective date of the Consolidation [4] - CLS Holdings USA Inc. operates as a diversified cannabis company, focusing on integrated cannabis production and retail, utilizing a patented method for cannabinoid extraction [5]

Core Insights - Celestica, Inc. is well-positioned to benefit from the growing AI proliferation in the data center and edge infrastructure market, with the AI hardware market expected to grow at a 22.4% CAGR, reaching $210.5 billion by 2034 from $34.05 billion in 2025 [1] - The company is expanding its offerings through innovation and strategic collaborations to capitalize on emerging market trends [2] - Celestica's extensive 800G Family of Networking Switches is anticipated to be a major growth driver, optimized for AI/ML and Big Data Analytics [3] Company Developments - The DS4100 switch, designed with Broadcom's TH4-12.8T switch chipset, is gaining traction in the data-center networking market [2] - The introduction of the ES1500 switch is tailored for edge AI deployments and IoT expansion in various sectors [3] - Celestica's shares have surged 167.5% over the past year, outperforming the industry's growth of 96.4% [7][8] Competitive Landscape - Competitors include Jabil, Inc. and Flex Ltd., both of which are also benefiting from demand in AI-related sectors [4] - Jabil announced a $500 million multi-year investment initiative to expand its manufacturing capabilities in the AI data center infrastructure market [5] - Flex is focusing on industrial AI and has improved its data center solutions through the acquisition of JetCool Technologies [6] Valuation Metrics - Celestica trades at a forward P/E ratio of 27.89, which is above the industry average, potentially raising valuation concerns [8][9] - The Zacks Consensus Estimate for Celestica's earnings for 2025 and 2026 has remained unchanged over the past 60 days [11]

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Core Insights - Celestica (NYSE: CLS) has doubled in value since coverage initiation, significantly outperforming the S&P 500, driven by strong demand in AI-driven capital expenditures [1] Company Analysis - Leadership & Management: Celestica demonstrates a proven track record in scaling businesses, smart capital allocation, and insider ownership, alongside consistent revenue growth and credible guidance [1] - Financial Health: The company exhibits sustainable revenue growth with efficient cash flow, a strong balance sheet, and a long-term survival runway, while avoiding excessive dilution and financial weakness [1] Market Positioning - Competitive Advantage: Celestica benefits from a strong technology moat and first-mover advantage, with network effects that drive exponential growth and market penetration in high-growth industries [1] Investment Methodology - Valuation: The analysis includes revenue multiples compared to peers and DCF modeling, with a focus on institutional backing and market sentiment to ensure downside protection while maximizing upside potential [1] - Portfolio Construction: The investment strategy includes core positions (50-70%), growth bets (20-40%), and speculative investments (5-10%) to balance risk and reward [1]

Group 1 - Celestica's stock increased by 2.81% to $159.26, outperforming the S&P 500's gain of 0.83% and the Dow's rise of 0.77% [1] - Over the past month, Celestica's stock has risen by 29.19%, leading the Computer and Technology sector's gain of 8.25% and the S&P 500's gain of 4.99% [1] Group 2 - Celestica is projected to report earnings of $1.23 per share, representing year-over-year growth of 35.16%, with expected revenue of $2.65 billion, a 10.95% increase compared to the previous year [2] - For the full year, analysts expect earnings of $5.05 per share and revenue of $10.91 billion, marking changes of +30.15% and +13.15% respectively from last year [3] Group 3 - Recent modifications to analyst estimates for Celestica reflect short-term business trends, with positive revisions indicating a favorable outlook on business health and profitability [4] - The Zacks Rank system, which incorporates estimate changes, provides an actionable rating system, with Celestica currently holding a Zacks Rank of 3 (Hold) [5][6] Group 4 - Celestica is trading with a Forward P/E ratio of 30.65, which is a premium compared to the industry average Forward P/E of 21.91 [7] - The Electronics - Manufacturing Services industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 42, placing it in the top 18% of over 250 industries [7][8]

Core Insights - Celestica, Inc. (CLS) has experienced a significant stock surge of 67.9% year-to-date, outperforming the Electronics - Manufacturing Services industry's growth of 44.7% and the broader Computer & Technology sector as well as the S&P 500 [1][8] Company Performance - The company has outperformed peers such as Jabil, Inc. (JBL) and Sanmina Corporation (SANM), with Jabil's shares increasing by 54.2% and Sanmina's by 33.8% [2][8] - Celestica's strong research and development capabilities enable it to produce high-volume electronic products and complex technology infrastructure products across various industries, enhancing its market penetration [3][8] Market Position - The company maintains a strong presence in multiple sectors, including aerospace and defense, industrial, communications, enterprise, HealthTech, and capital equipment, which helps reduce dependence on any single industry [4][8] - In Q1 2025, Celestica's current ratio was 1.43, surpassing the industry's 1.19, indicating a solid position to meet short-term obligations. The times interest earned improved to 11.4 from 6.2 a year ago, and the debt-to-capital ratio is 37.7%, compared to the industry's 45.9% [5][8] Challenges and Competition - The Electronics - Manufacturing industry is highly competitive, with significant competition from giants like Foxconn, Jabil, and Sanmina, as well as smaller regional players [6][8] - Jabil is gaining traction in the AI data center infrastructure market, which could challenge Celestica's prospects in that vertical. Sanmina is also enhancing its position in the data center vertical through a $3 billion acquisition [9][10] Global Exposure - Celestica generates a significant portion of its revenues outside North America, making it vulnerable to geopolitical volatility and foreign exchange fluctuations [11][8] Future Outlook - Earnings estimates for Celestica for 2025 and 2026 have remained unchanged over the past 60 days, with current estimates at 1.23 for Q1, 1.29 for Q2, 5.05 for FY 2025, and 6.07 for FY 2026 [13][14] - The company is expected to benefit from solid demand for its 400G and 800G switch products, driven by the increasing use of high bandwidth-intensive AI applications [15][8]