The company has lifted its revenue projection for the fiscal year 2025, forecasting $10.85 billion, an upward revision from its earlier estimate of $10.7 billion. This adjustment aligns closely with market expectations, as analysts had predicted $10.81 billion. The company attributes this optimistic outlook to rising demand from its CCS (Customer Communication Services) clientele.
Alongside the updated revenue figures, the company has also increased its non-GAAP adjusted earnings per share (EPS) forecast. It now anticipates an EPS of $5.00, improving from the previous estimate of $4.75. This revision underscores the company's confidence in its financial growth and operational performance heading into 2025.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Celestica Inc (CLS, Financial) is $128.86 with a high estimate of $160.00 and a low estimate of $95.00. The average target implies an upside of 39.85% from the current price of $92.14. More detailed estimate data can be found on the Celestica Inc (CLS) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Celestica Inc's (CLS, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Celestica Inc (CLS, Financial) in one year is $32.21, suggesting a downside of 65.04% from the current price of $92.14. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Celestica Inc (CLS) Summary page.
CLS Key Business Developments
Release Date: January 30, 2025
- Q4 2024 Revenue: $2.55 billion, up 19% year-over-year.
- Adjusted EPS: $1.11, exceeding the high end of guidance.
- Adjusted Operating Margin: 6.8%, an increase of 80 basis points.
- Adjusted Gross Margin: 11.0%, up 50 basis points.
- Adjusted ROIC: 29.1%, an improvement of 550 basis points.
- CCS Segment Revenue: $1.74 billion, up 30% year-over-year.
- ATS Segment Revenue: $806 million, approximately flat year-over-year.
- Free Cash Flow: $96 million for Q4; $306 million for full year 2024.
- Inventory Balance: $1.76 billion, a year-over-year decrease of $344 million.
- Cash Balance: $423 million at the end of Q4.
- Gross Debt: $741 million, resulting in a net debt position of $318 million.
- Share Repurchases: $152 million in 2024, reducing shares outstanding by 2.4%.
- 2025 Revenue Guidance: $10.7 billion, reflecting 11% growth.
- 2025 Adjusted EPS Guidance: $4.75, representing 22% growth.
- 2025 Free Cash Flow Guidance: $350 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Celestica Inc (CLS, Financial) reported strong Q4 2024 performance with revenues of $5 billion, reaching the high end of their guidance range.
- The company achieved an adjusted EPS of $1.11, exceeding the high end of their guidance range.
- The CCS segment experienced robust demand, delivering 30% year-over-year growth, driven by hyperscale customer demand.
- Celestica Inc (CLS) reported a significant improvement in adjusted ROIC, reaching 29.1%, attributed to higher operating profitability and effective working capital management.
- The company announced major new wins, including a 1.6T switching program with a large hyperscale customer and a significant HPS win with a leading digital native company.
Negative Points
- The ATS segment revenue was approximately flat, with lower revenues in the industrial business offsetting growth in capital equipment and aerospace and defense.
- Enterprise end market revenue decreased by 10% due to a technology transition in an AI compute program with a hyperscale customer.
- The company experienced a sequential decrease in cash deposits, down $9 million, and a year-over-year decrease of $393 million.
- Celestica Inc (CLS) anticipates a mid-40% decrease in enterprise end market revenue in Q1 2025 due to a temporary decline in volumes.
- The company faces challenges in maintaining growth in the industrial business, which has been impacted by macro factors and customer inventory digestion.
