Key insights
- The author initiated a long position in Celestica (CLS) based on projected revenue, FCF, EBITDA, and EPS growth, particularly driven by AI infrastructure spending. A DCF analysis suggests a fair value significantly above the current price. Risks include customer concentration and a potential slowdown in AI capital expenditure. The technical chart is currently weak, but the author sees this as a buying opportunity.
Bought some Celestica (CLS) earlier today at ~365. Curious to hear some thoughts on this company.
For anyone who doesn’t know Celestica, they’re essentially the company behind the scenes helping some of the world’s biggest businesses turn designs into real, working hardware at scale.
They build and integrate things like servers, networking gear, storage systems and aerospace technology.
A lot of companies can design great products. Far fewer can actually manufacture them properly, source all the components, test them, and deliver them globally without things breaking.
Been looking into their numbers (actuals and estimates) and it looks promising.
From LSEG Refinitiv:
Revenue FY25: ~$12.4B FY26: ~$19.1B FY27: ~$27.1B FY28: ~$33.7B
FCF FY25: ~$458M FY26: ~$478M FY27: ~$487M FY28: ~$876M
EBITDA FY25: ~$1.06B FY28: ~$3.33B
EPS FY25: 7.16 FY26: 9.13 FY27: 13.95 FY28: 18.20
Quick DCF (10% discount rate, 4% terminal growth, moderate execution assumptions) gets me somewhere around $500–550 fair value, with more upside if hyperscaler/AI infra spend stays elevated.
Technically the chart is ugly right now (RSI near oversold, short-term downtrend), which is exactly why I pulled the trigger.
Main risk I see is customer concentration + AI capex cooling.
Anything I’m missing here? Why shouldn’t this be worth 550+ in coming years? Interested to hear some thoughts. Thanks