Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task. That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss. However, the task of finding cutting-edge growth stocks ...

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies. Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics a ...

Celestica Inc. (CLS) recently announced the commercial availability of SC6100 – a next-generation, 2U rackmount all-flash storage controller designed to deliver superior performance for the most demanding enterprise application workloads. Powered by two EPYC Embedded 9004 series processors from Advanced Micro Devices, Inc. (AMD) , it offers improved energy efficiency for next-generation networking, security and storage applications. Harnessing the performance and efficiency benefits of the new "Zen 4" core ...

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important? 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) . Celestica currently has an average brokerage recommendation (ABR) of 1.86, o ...

Investment Thesis - Celestica's stock has increased by 8% since late April, outperforming the broader U.S. market, supported by robust Q2 earnings [4] - The company achieved a 23% year-over-year revenue growth in Q2 2024, reaching $2.39 billion, and adjusted EPS increased from $0.55 to $0.91 [5][6] - Management's guidance indicates strong momentum in AI and data centers, suggesting continued growth and market share gains [4][10] Financial Performance - Q2 2024 highlights include a non-IFRS operating margin of 6.3%, up 80 basis points year-over-year, and adjusted EPS of $0.91, up 36 cents year-over-year [6][11] - The Connectivity & Cloud Segment (CCS) revenue grew by 51% year-over-year, while the Advanced Technology Segment (ATS) revenue decreased by 11% year-over-year [7][10] - The company's free cash flow remains positive, with a 26.7% adjusted return on invested capital (ROIC) in Q2 2024, compared to 20.0% in Q2 2023 [11] Guidance and Outlook - For Q3 2024, revenue is expected to be between $2.325 billion and $2.475 billion, indicating a potential 17.6% year-over-year growth [13][14] - The full-year revenue outlook for 2024 has been raised from $9.1 billion to $9.45 billion, with adjusted EPS guidance increased from $3.30 to $3.62 [15][16] Competitive Positioning - Celestica's revenue growth and profitability improvements are unmatched by its closest peers in the Electronic Manufacturing Services (EMS) industry, indicating a strong competitive edge [17][22] - The company's valuation ratios remain significantly lower than the sector median, suggesting that the stock is undervalued despite a 130% increase over the last twelve months [23][24] Valuation Analysis - A discounted cash flow (DCF) analysis indicates that Celestica's fair value is approximately $18 billion, significantly higher than its current market cap of $5.47 billion, suggesting a potential upside of 229% [29][30] - Even under conservative growth assumptions, the stock remains undervalued by 55% [29]

Core Viewpoint - Investors are seeking growth stocks that can deliver above-average growth and exceptional returns, but identifying such stocks is challenging due to their inherent risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system simplifies the identification of promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Celestica (CLS) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for investors, with double-digit growth being a strong indicator of a company's potential [4] - Celestica's historical EPS growth rate is 42.7%, with projected EPS growth of 50.2% this year, significantly outperforming the industry average of -3.8% [5] Group 3: Cash Flow Growth - Higher-than-average cash flow growth is essential for growth-oriented companies, enabling them to expand without relying on external funding [6] - Celestica's year-over-year cash flow growth is 19.4%, exceeding the industry average of 12.7% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 19.2%, compared to the industry average of 9.2% [7] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with stock price movements [8] - Celestica has seen a 12.4% increase in current-year earnings estimates over the past month [8] Group 5: Conclusion - Celestica has achieved a Growth Score of A and a Zacks Rank 1 due to its strong earnings estimate revisions and growth metrics, positioning it well for potential outperformance [9][10]

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks. Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis ...

J Studios Intro & Thesis In August 2023, I initiated coverage of Celestica Inc. (NYSE:CLS) stock and then confirmed the "Buy" rating again in November. Since then, the stock has continued to rise, and at some point, its rally made me cautious against the backdrop of valuation ratios that were moving away from historical averages, and I eventually downgraded CLS to "Hold", confirming that rating 3 months ago. Since my last neutral thesis update, the stock's price has decreased by almost 1.7%, while the marke ...

Investment Rating - The report assigns a positive outlook for the company, indicating strong growth potential in the upcoming quarters, particularly in the CCS segment [27][32]. Core Insights - The company achieved a revenue of $2.392 billion in Q2 FY2024, representing a 23% year-over-year increase, driven primarily by the robust performance of the CCS segment [27][32]. - The CCS segment's revenue grew by 51% year-over-year, accounting for 68% of total revenue, while the ATS segment saw a decline of 11% [27][32]. - The company expects Q3 revenue to be between $2.325 billion and $2.475 billion, with adjusted earnings per share projected between $0.86 and $0.96 [42][49]. Summary by Sections Overall Revenue Situation - In Q2 FY2024, the company reported a gross profit of $256.1 million, up 39% year-over-year, and a net profit of $99.6 million, reflecting a 79% increase [27][32]. - The company has been actively repurchasing shares, spending $10 million to buy back approximately 200,000 shares in Q2 [27][32]. Revenue Breakdown - The ATS segment generated $770 million in revenue, down 11% year-over-year, while the CCS segment brought in $1.62 billion, up 51% [27][32]. - The strong growth in the CCS segment was attributed to the demand from large-scale customers for HPS network products, particularly in AI/ML infrastructure [27][32]. Q3 Company Performance Guidance - The company anticipates a revenue range of $2.325 billion to $2.475 billion for Q3, with an expected adjusted operating profit margin of 6.3%, an increase of 60 basis points from the previous year [42][49]. - The adjusted SG&A expenses are projected to be between $73 million and $75 million, with an effective tax rate around 20% [42][49]. Full-Year Outlook - The company raised its full-year revenue forecast to $9.45 billion, with adjusted earnings per share expected to be $3.62, representing a 19% and 49% increase, respectively, compared to 2023 [49][52]. - The company remains optimistic about the overall demand environment, particularly in the CCS segment, driven by strong customer relationships and a diverse product portfolio [53][81].

Celestica Inc. (NYSE:CLS) Q2 2024 Earnings Conference Call July 25, 2024 8:00 AM ET Company Participants Craig Oberg - Vice President, IR & Corporate Development Rob Mionis - President & Chief Executive Officer Mandeep Chawla - Chief Financial Officer Conference Call Participants Thanos Moschopoulos - BMO Capital Markets Matthew Sheerin - Stifel Nicolaus Steven Fox - Fox Advisors Daniel Chan - TD Cowen Paul Treiber - RBC Capital Markets Jesse Pytlak - Cormark Securities Todd Coupland - CIBC Operator Good mo ...