Valuing Celestica (TSX:CLS) After Strong Q3 2025 Growth and Upbeat AI-Driven Outlook

Celestica (TSX:CLS) stock caught investors’ attention after the company delivered third quarter 2025 results that surpassed both its own expectations and those of analysts. Impressive gains in revenue and earnings were driven by strong demand across AI and Communications markets.

See our latest analysis for Celestica.

Celestica’s share price has rocketed higher, notching a 48% gain over the past month and an eye-popping 259.7% share price return so far in 2025, as investors cheer surging AI infrastructure demand and upbeat earnings guidance. Recent board appointments and an expanded share buyback program add to the positive momentum. The company’s one-year total shareholder return now stands at an extraordinary 392.7%, showing just how much momentum has built in a short time frame.

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Yet with Celestica shares trading at all-time highs and the future looking bright, investors must now ask whether the stock still offers value, or if the market has already factored in the next stage of growth.

Most Popular Narrative: 14.7% Undervalued

Celestica’s most widely followed valuation narrative puts its fair value sharply above the current share price, implying further upside is possible. The narrative’s fair value of CA$565.81 is 14.7% above the last close of CA$482.87, highlighting expectations for strong earnings momentum to continue.

Accelerated demand for advanced networking and AI infrastructure by hyperscaler customers is driving rapid growth in Celestica's CCS segment. Multiple new 800G and upcoming 1.6T program ramps are supporting robust revenue expansion and greater operating leverage over the next 12 to 24 months.

Read the complete narrative.

Want to know why growth expectations run so high for Celestica? The narrative is betting on huge operational shifts, future profitability, and ambitious revenue ramps. What assumptions could push value even higher? See the full story and the numbers behind the headlines.

Result: Fair Value of $565.81 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heavy reliance on a few hyperscaler customers and rapid expansion tied to AI demand could both reverse quickly if spending trends shift.

Find out about the key risks to this Celestica narrative.

Another View: Price Multiples Raise Questions

While the most popular narrative points to Celestica’s shares as undervalued, a look at price-to-earnings offers a much more cautious perspective. Celestica’s P/E ratio stands at 55.3x, which is well above the North American industry average of 24.1x and notably higher than its peers at 33.4x. Even when compared to a fair ratio derived from market data (50.1x), Celestica appears pricey. Such a gap often signals increased valuation risk, meaning investors may be paying a premium for growth that needs to keep delivering.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Celestica Narrative

If you’d like to dig into the numbers yourself or form your own point of view, you can build a narrative from scratch in just a few minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Celestica.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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