Why Celestica Stock Jumped 10% Last Week

Celestica stock surged 10% after earnings, so let’s get into why.

Amy Legate-Wolfe

Author Bio

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

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Published May 20, 2025 9:45 pm EDT

Celestica (TSX: CLS) stock has been quietly climbing for some time now, but last week, it took a confident leap. Shares of the company jumped more than 10%, landing around $153.84. That kind of move doesn’t happen by accident. The rally came right after the company released its first-quarter results, and investors clearly liked what they saw.

Income and growth financial chart — Source: Getty Images

What happened

At first glance, the reason for the surge is pretty straightforward: strong earnings. But it’s not just that Celestica stock beat expectations. It’s also how it beat them, and what that says about its long-term potential. The company reported first-quarter 2025 revenue of US$2.7 billion. That’s a solid 20% increase compared to the same quarter in 2024. In today’s environment, where growth isn’t a given, that kind of top-line performance stands out.

More impressive, though, was its profitability. Celestica’s non-GAAP adjusted earnings per share hit US$1.20, well above the high end of its guidance range. Investors pay close attention to guidance, and when a company not only meets but beats its own targets, it builds confidence.

A big part of that growth came from its Connectivity & Cloud Solutions (CCS) segment, which saw revenue rise 28% year-over-year. This segment includes design and supply chain services for networking and storage, and cloud infrastructure companies. Simply put, it’s where Celestica stock taps into the booming demand for data centres, artificial intelligence (AI) computing, and cloud services.

Showing strength

Meanwhile, its Advanced Technology Solutions (ATS) segment posted a 5% increase. That may seem modest in comparison, but it’s still solid growth in an area that supports aerospace, defence, healthcare, and energy markets. These are steady industries with long contracts and high barriers to entry. So, while CCS is the engine, ATS is the anchor: reliable and durable.

Celestica also improved its adjusted operating margin, which came in at 7.1%, up from 5.9% the year before. That shows the company is growing efficiently. Higher margins mean more of each dollar earned turns into profit. In a competitive sector like manufacturing and supply chain services, that’s a sign of strong management and cost control.

And the good news didn’t stop there. Based on the strong start to the year, Celestica raised its full-year guidance. It now expects to bring in US$10.9 billion in revenue, up from US$10.7 billion previously. It also lifted its adjusted earnings forecast to US$5.00 per share from US$4.75. Companies don’t raise guidance unless they’re confident. Investors took that as a clear green light.

More to come

Celestica also announced that it had repurchased 600,000 shares in the first quarter, spending US$75 million. Share buybacks signal that management sees the stock as undervalued. It also reduces the number of outstanding shares, which boosts earnings per share for remaining shareholders. That’s another reason the stock got a bump; investors like to know the company is investing in itself.

So, what’s driving all this growth? Celestica is a behind-the-scenes powerhouse. It builds and manages complex supply chains for some of the world’s biggest tech, aerospace, and industrial firms. As companies increasingly outsource design, manufacturing, and logistics, Celestica becomes more valuable. Its ability to handle everything from circuit boards to entire systems makes it a go-to partner for innovation-heavy businesses.

Looking ahead, the big question is whether Celestica stock can keep this momentum going. Based on its raised forecast, strong balance sheet, and expanding margins, it looks like it has the tools to do just that. Analysts have taken note, too, as several have increased their price targets since the earnings release, pointing to continued confidence in the company’s direction.

Bottom line

In a market full of ups and downs, Celestica’s story is a refreshing one. Strong demand, clear execution, and a leadership team that’s not afraid to back its own strategy with real results. For long-term investors looking for growth without the rollercoaster, Celestica stock is starting to look like one of the more dependable rides on the TSX. So, why did Celestica stock jump 10% last week? Because it earned it. And if it keeps up this pace, it might just have more room to run.