Celestica’s ODM Boom Could Send This $10B Tech Stock Parabolic!
Highlights CLS ODM’s explosive potential and ties it to the company’s valuation
$Celestica(CLS)$
The kicker? Celestica’s Original Design Manufacturing (ODM) business could send it soaring. Unlike standard EMS, ODM means designing custom tech—like AI-optimized hardware or 5G solutions—from scratch. With AI spending eyeing $300 billion by 2026 and 5G booming, ODM’s higher margins and scalability could turn growth parabolic. Analysts forecast $10.81 billion in 2025 (12% growth) and $12.72 billion in 2026 (18% growth), yet at a $10.04 billion market cap and a forward P/E below its peers, CLS looks ripe for a valuation reset. Rated a ‘Strong Buy,’ this tech supply chain beast might reclaim—and exceed—that February peak. Time for Wall Street to wake up?
Current Valuation Context: As of March 12, 2025, CLS’s market cap is $10.04 billion, with a current price of $86.59. Post-Q4 2024 earnings (January 29, 2025), it reported $1.11 adjusted EPS and $2.55 billion revenue, with 2025 guidance at $4.75 EPS and $10.7 billion revenue. This gives a forward P/E of ~18.2 ($86.59 / $4.75), which is reasonable but potentially low compared to high-growth tech peers (e.g., Nvidia’s 50+ or Jabil’s 20+).
Growth Catalysts:
ODM Potential: The shift to higher-margin, design-led ODM business (custom AI/5G hardware) could boost profitability beyond traditional EMS, warranting a premium valuation.
Revenue Trajectory: 12% growth in 2025 and 18% in 2026 outpace many EMS rivals, yet CLS trades at a discount to its 240% two-year stock run.
Market Trends: AI and 5G tailwinds align Celestica with hotter sectors, suggesting its current multiple doesn’t fully price in this exposure.
Post-Peak Pullback: The drop from $144.27 to $86.59 might reflect short-term noise (tariffs, market rotation), not fundamentals, making it a buying opportunity if re-rated upward.
Analyst Sentiment: The ‘Strong Buy’ rating (e.g., Zacks Rank #1, Yahoo Finance’s $125+ targets) supports a case for a higher multiple—say, 25x forward earnings, pushing CLS toward $118+ on 2025 EPS alone.
@TigerPM @TigerObserver @TigerStars @Tiger_comments @Daily_Discussion
Modify on 2025-03-12 07:29
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- windy00·03-12
thanks for sharing! CLS rises 6% yesterday, adding to my watchlist
1Report