Celestica: I've 3xed My Investment But I'm Still Buying More (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Celestica’s leading position in Ethernet switches and custom HPS platforms is driving guidance upgrades, with management expecting around 40% annual CCS growth through 2026 and visibility into at least 2027.
• CLS plans to nearly double capex intensity to 2.0%–2.5% of revenue in FY26, funded by operating cash flow, to expand manufacturing capacity for strong demand expected through FY28.
• Higher‑margin HPS revenues are growing faster than the rest of the business, supporting steady CCS and overall EBIT margin expansion, with upside remaining as HPS mix continues to increase.
• Wall St has recently revised capex expectations downward for key hyperscaler customers like Microsoft, Meta, Amazon, and Alphabet, creating a risk if actual data center capex disappoints from these customers.
• CLS trades at a rich forward earnings multiple versus peers, but a recent valuation correction alongside broad-based upward EPS revisions and constructive technical consolidation keeps me bullish.

Read the full article here.